topic Re: IRA Rollover Contribution in Retirement tax questions

IRA Rollover Contribution

ronbigg — Sun, 26 Jan 2020 16:05:42 GMT

In 2019 I did a direct rollover from a cash balance pension to an IRA. I made several withdrawals during the year (I am over 59 1/2). Can I still make a maximum contribution of $7,000 in January and apply it to the 2019 tax year?

Re: IRA Rollover Contribution

Critter — Sun, 26 Jan 2020 16:35:42 GMT

The rollover is immaterial as are the distributions from an IRA.

If you have qualifying income to make an IRA contribution you can do so and deduct it on the return. You have until 4/15/20 to make a 2019 contribution ... make sure the custodian knows it is for 2019 and not 2020.

Re: IRA Rollover Contribution

ronbigg — Sun, 26 Jan 2020 16:40:12 GMT

Thanks....I think I know the answer, but I am assuming that Self Employment income would be qualifying income...correct?

Re: IRA Rollover Contribution

macuser_22 — Sun, 26 Jan 2020 16:48:46 GMT

@ronbigg wrote:

Thanks....I think I know the answer, but I am assuming that Self Employment income would be qualifying income...correct?

*NET* self-employed earnings minus the deductible part of the SE tax (1/2 the SE tax).

The most you can contribute to all of your traditional and Roth IRAs is the smaller of:

For 2018, $5,500, or $6,500 if you’re age 50 or older by the end of the year; or
your taxable compensation for the year.

For 2019, $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.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, 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_2018_publink1000230355

See this IRS article for Roth contribution limits:

https://www.irs.gov/retirement-plans/roth-iras