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Level 2
posted Mar 17, 2022 5:33:45 PM

Type of Earned Income for Roth IRA

  • I had a total of 6,000 inW2 Earned Income in 2019.
  • I also had a loss of -5,000 in 1099 Income in 2019.
  • I contributed 6,000 to my 2019 Roth IRA.

Is my Earned Income based on just my W2 or both W2 and 1099 combined?  

In other words, Do I have a 5,000 excess contribution in 2019? 

 

Any guidance on how to correct this in TurboTax would be greatly appreciated. 

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1 Best answer
Expert Alumni
Mar 18, 2022 2:57:18 PM

Just your W-2.  And no, you don't have a $5,000 excess contribution in 2019.  Generally, if you're not earning any income, you can't contribute to either a traditional or a Roth IRA.  If you have a net loss from self-employment, (we assume your 1099-Misc income was from some type of self-employment because you mentioned it resulted in a loss) don’t subtract that loss from your salaries or wages when figuring your total compensation. 

 

Thus, in your case, you had earned income of $6,000 in 2019, and therefore, you could contribute $6,000 to a Roth IRA.

 

@IRStress

1 Replies
Expert Alumni
Mar 18, 2022 2:57:18 PM

Just your W-2.  And no, you don't have a $5,000 excess contribution in 2019.  Generally, if you're not earning any income, you can't contribute to either a traditional or a Roth IRA.  If you have a net loss from self-employment, (we assume your 1099-Misc income was from some type of self-employment because you mentioned it resulted in a loss) don’t subtract that loss from your salaries or wages when figuring your total compensation. 

 

Thus, in your case, you had earned income of $6,000 in 2019, and therefore, you could contribute $6,000 to a Roth IRA.

 

@IRStress