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Level 2

Solved

1099-NEC

Forum|Forum|3 years ago
March 20, 2023
1 reply
11 views

I would like my two granddaughters to start Roth IRAs based on the 1099-NEC's they received for $900 for being a educational summer camp counselor (1 week) and $1000 for being a recreational soccer league referee (many games over an 8 week season), respectively. Both seem to be earned income for a sporadic activity but TT seems to treat it as an unearned hobby income and therefore not a basis for a Roth IRA.

1. Is that correct?

2. If not, how do they report the 1099-NEC compensation as basis for an IRA without creating a self-employed situation and associated schedule C requirements... or is this not possible as compensation for sporadic activity is not earned income by IRS definition?

Best answer by Bsch4477

Correct. Sporadic or hobby income is not earned income for the purpose of contributing to an IRA.

Answer

Level 15

Correct. Sporadic or hobby income is not earned income for the purpose of contributing to an IRA.