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dbrewers
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Why is my IRA contribution of $6,000 non-deductible because it is more than my "earned income". My SSA1099 if for $17,940?

 
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4 Replies

Why is my IRA contribution of $6,000 non-deductible because it is more than my "earned income". My SSA1099 if for $17,940?

Social Security is not earned income.  You need wages on a W2 or a Net Profit from self employment on schedule C to have earned income.

Why is my IRA contribution of $6,000 non-deductible because it is more than my "earned income". My SSA1099 if for $17,940?

Social Security is not earned income (such as W-2 income or self-employed income.)

 

The IRS calls it "taxable compensation".

 

The maximum IRA contributions for 2020 is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deductible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2020_publink1000230355

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

Why is my IRA contribution of $6,000 non-deductible because it is more than my "earned income". My SSA1099 if for $17,940?

[removed by me]

Why is my IRA contribution of $6,000 non-deductible because it is more than my "earned income". My SSA1099 if for $17,940?

oops.

my brain must be shot after a tough week.

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