Roth IRA

[leanntichenor]

Hello, I made ~2500 with W-2 wages last year, my husband made $9500 as a 1099.  They are letting me enter a contribution to my Roth IRA for the full amount, but not allowing my husband to enter the limit of $8000 without paying a penalty for contributing too much (we have not yet contributed, but planned on doing so, based upon advise given by our financial planner)  Please advise and thank you.

[ThomasM125]

If you mean you had wage income of $2,500 and your husband had self-employment income of $9,500, then the total you could contribute to an IRA between the two of you would be $12,000, the total earned. You don't say how much you contributed, so I'm not sure if you entered more than the $12,000 in combined contributions. Also, you mention 1099 income, I assume that is self-employment income, if not it doesn't qualify as earned income for IRA contribution purposes. Also, it would be the net income that you need to use, which would be the gross income reported on the 1099 form less business expenses.

[AmeliesUncle]

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@leanntichenor wrote:

 my husband made $9500 as a 1099.  

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Is that reported as a business on Schedule C?  If so, what is the PROFIT of the business (after expenses)?  See line 3 of Schedule 1.

What are the amounts on line 15 (the 1/2 SE tax deduction) and line 16 (self-employed retirement plans) on Schedule 1?