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Level 1
Oct 27, 2021 5:31 PM UTC
Question

traditional ira contribution

I have had very little income from my work as a touring musician in 2020. I made some money from royalties and selling cds. But those earnings are not enough to cover traditional IRA contributions for myself and my wife.

However I did earn money from dividends and interest. I also earned money from unemployment. Which of these incomes can be counted as earned income that I can use to make IRA contributions?

    2 replies

    VolvoGirl
    Level 15
    Oct 27, 2021 5:37 PM UTC

    Sorry only W2 wages and a Net Profit on Schedule C count as earned income and some Schedule K-1 income.  Not interest or dividends or unemployment.  

    DoninGA
    Level 15
    Level 15
    Oct 27, 2021 5:38 PM UTC

    Neither unemployment compensation or interest and dividend income is taxable compensation.  So they cannot be used for contributing to an IRA.