topic Son (dependent) earned $800 as a referee. If he has $200 expense (uniform/travel) can he contribute $800 to Roth IRA or is he limited to $600? in Retirement tax questions

Son (dependent) earned $800 as a referee. If he has $200 expense (uniform/travel) can he contribute $800 to Roth IRA or is he limited to $600?

tswengros — Tue, 10 Mar 2026 07:26:35 GMT

Re: Son (dependent) earned $800 as a referee. If he has $200 expense (uniform/travel) can he contribute $800 to Roth IRA or is he limited to $600?

NCperson — Wed, 07 Dec 2022 18:56:17 GMT

@tswengros - first question - was he a W-2 employee or 1099 self-employed. if W-2, that $200 can't be deducted.

Also, be aware there will be 15.3% self-employment tax if he was a 1099 self employed individual - that is really the social security and medicare taxes that w-2 employees and their employers pay. it is NOT "income tax".

But otherwise, he can contribute up to what he earned.

Re: Son (dependent) earned $800 as a referee. If he has $200 expense (uniform/travel) can he contribute $800 to Roth IRA or is he limited to $600?

dmertz — Wed, 07 Dec 2022 20:07:34 GMT

If he receives a W-2, the amount he can contribute to a Roth IRA is the amount shown in box 1 of the W-2.

If he is an independent contractor and not an employee who receives a W-2, he is self-employed and must file Schedules C and SE. On Schedule C he'll deduct his business expenses. If Schedule C shows $600 profit, his maximum Roth IRA contribution will be $600 minus one-half of his self-employment tax. That would be a maximum contribution of $557.

Re: Son (dependent) earned $800 as a referee. If he has $200 expense (uniform/travel) can he contribute $800 to Roth IRA or is he limited to $600?

Opus 17 — Wed, 07 Dec 2022 20:40:23 GMT

@dmertz wrote:

If he receives a W-2, the amount he can contribute to a Roth IRA is the amount shown in box 1 of the W-2.

If he is an independent contractor and not an employee who receives a W-2, he is self-employed and must file Schedules C and SE. On Schedule C he'll deduct his business expenses. If Schedule C shows $600 profit, his maximum Roth IRA contribution will be $600 minus one-half of his self-employment tax. That would be a maximum contribution of $557.

Because the Roth contribution limit for a self-employed person isn't known finally until completing the person's tax return, you may want to wait until after you prepare the return to make the contribution. He can contribute to a Roth for the 2022 tax year until April 15, 2023. He just has to make sure to let the plan custodian know that it is a contribution for the prior year.