My daughter worked a summer internship with a state department and received $500. The organization didn’t issue any 1099 form because they said no form is required for payments under $600. She is filing her taxes and has reported the $500 as 'Other Income.' My question is: Can she contribute to a Roth IRA based on that $500, since it is earned income? This is the only income she has. Or is she not eligible because she didn’t receive a tax document from the organization?
She is eligible to contribute to a Roth IRA. If the $500 is the only income she has, she doesn't need to file a tax return. You don't have to fie a tax return to contribute to a Roth IRA. You just have to have earned income.
@pgpg careful, because she is paying SE tax, the maximum Roth contribution is $463.
She is eligible to contribute to a Roth IRA. If the $500 is the only income she has, she doesn't need to file a tax return. You don't have to fie a tax return to contribute to a Roth IRA. You just have to have earned income.
@pgpg careful, because she is paying SE tax, the maximum Roth contribution is $463.