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Returning Member
posted May 11, 2023 1:56:51 PM

program keeps saying I do not have enough earned income for ira contribution, but i do!

software wont let me enter the $7000 ira contributions saying i do not have enough earned income, even though I have plenty of net income...what could be wrong?

0 7 1474
7 Replies
Level 15
May 11, 2023 1:58:15 PM

What kind of income do you have?  You need W2 wages or a Net Profit on  Schedule C to be earned income.  

Level 15
May 11, 2023 2:00:32 PM

Oh you said net income?  Do you have schedule C for self employment income?  If you have self-employment income you can only contribute up to your net profit reduced by the deduction allowed for the ER portion of your self-employment taxes.  So you have to subtract half of the SE tax from the profit.  

 

See IRS publication 590A page 6 about self employment income (it applies to both Traditional and ROTH IRAs)
https://www.irs.gov/pub/irs-pdf/p590a.pdf

Returning Member
May 11, 2023 2:04:33 PM

yes I have multiple businesses all schedule C's, some with losses, others with profits, net overall I show positive net income, even with the SE tax deducted...is it a glitch? 

Returning Member
May 11, 2023 2:09:39 PM

program keeps saying my earned income is zero....

Level 15
May 11, 2023 2:18:39 PM

Are you married?  Make sure each schedule C is for the right person.  And the IRA contribution is for the same person.  

Returning Member
May 11, 2023 7:16:14 PM

yes married, everything is for the right person...there is ample net income minus 1/2 SE tax for each of us... program will not let either of us contribute to the trad ira! 

Level 15
May 12, 2023 8:48:59 AM

Each individual's compensation available to support an IRA contribution is also reduced by the amount of that individual's deductible self-employed retirement contributions reported on Schedule 1 line 16.