topic Can 1099-NEC income be contributed to Roth IRA in Retirement tax questions

Can 1099-NEC income be contributed to Roth IRA

ningzhu60 — Sun, 14 Mar 2021 21:49:21 GMT

I also have another question.

My son, a high school student, received $1244 1099-NEC from teaching at a local non-profit school, along with additional $2300 w-2 income. On his tax return the $1244 was entered in 1099-NEC section, and counts as taxable income for Federal and State taxes. However he is not able to contribute $3000 amount to a Roth IRA, as it says he has exceeded his earned income ($2300 of w-2).
I'm wondering, does the 1099-NEC count as taxable income even he only earned a total of $3500? And if 1099-NEC does count as earned income, why can't it be contributed to Roth IRA?

Re: Can 1099-NEC income be contributed to Roth IRA

VolvoGirl — Sun, 14 Mar 2021 21:54:15 GMT

For an IRA contribution. If you only have self-employment income you can only contribute up to your net profit reduced by the deduction allowed for one-half of your self-employment taxes. See IRS publication 590 http://www.irs.gov/pub/irs-pdf/p590a.pdf

So what is his Net Profit on Schedule C minus Schedule 1 line 14?

Re: Can 1099-NEC income be contributed to Roth IRA

VolvoGirl — Sun, 14 Mar 2021 21:57:17 GMT

Oh and the 1099NEC income did get entered as self employment on schedule C? Not just as Other Income? Needs to be on Schedule C to count as earned income.

Re: Can 1099-NEC income be contributed to Roth IRA

VolvoGirl — Sun, 14 Mar 2021 22:06:19 GMT

According to my calculations he should be able to contribute up to $3,456 to a IRA. So you need to get the 1099NEC entered on Schedule C. Did he have any expenses to write off for it?

You can enter Self Employment Income into Online Deluxe or Premier but if you have any expenses you will have to upgrade to the Self Employed version. Or use any of the Desktop CD/Download programs.

How to enter income from Self Employment

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/26653

Re: Can 1099-NEC income be contributed to Roth IRA

ningzhu60 — Sun, 14 Mar 2021 22:23:51 GMT

Thank you very much for your quick respond. He entered in the 1099-NEC section and shows "other income". He needs to fix that part. Thanks.