Solved: My only income was alimony, and I am paying income taxes on the alimony (my ex husband is not). Is this considered income, so that I can contribute to my traditional IRA?
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My only income was alimony, and I am paying income taxes on the alimony (my ex husband is not). Is this considered income, so that I can contribute to my traditional IRA?

 
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Employee Tax Expert

My only income was alimony, and I am paying income taxes on the alimony (my ex husband is not). Is this considered income, so that I can contribute to my traditional IRA?

Yes, it does.  Please see this IRS reference:  Topic No. 451 Individual Retirement Arrangements (IRAs) | Internal ....  On that site you'll see this excerpt:  

To contribute to a traditional IRA, you must be under age 70½ at the end of the tax year. You, and/or your spouse if you file a joint return, must have taxable compensation, such as wages, salaries, commissions, tips, bonuses, or net income from self-employment. Taxable alimony and separate maintenance payments received by an individual are treated as compensation for IRA purposes. Compensation doesn't include earnings and profits from property, such as rental income, interest and dividend income, or any amount received as pension or annuity income, or as deferred compensation. (Italics added).

Please note, though, that with the tax law changes, your alimony will not be included in income in 2018, and therefore is not qualifying income for an IRA contribution.

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Employee Tax Expert

My only income was alimony, and I am paying income taxes on the alimony (my ex husband is not). Is this considered income, so that I can contribute to my traditional IRA?

Yes, it does.  Please see this IRS reference:  Topic No. 451 Individual Retirement Arrangements (IRAs) | Internal ....  On that site you'll see this excerpt:  

To contribute to a traditional IRA, you must be under age 70½ at the end of the tax year. You, and/or your spouse if you file a joint return, must have taxable compensation, such as wages, salaries, commissions, tips, bonuses, or net income from self-employment. Taxable alimony and separate maintenance payments received by an individual are treated as compensation for IRA purposes. Compensation doesn't include earnings and profits from property, such as rental income, interest and dividend income, or any amount received as pension or annuity income, or as deferred compensation. (Italics added).

Please note, though, that with the tax law changes, your alimony will not be included in income in 2018, and therefore is not qualifying income for an IRA contribution.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Level 15

My only income was alimony, and I am paying income taxes on the alimony (my ex husband is not). Is this considered income, so that I can contribute to my traditional IRA?

You can still contribute to a 2017 IRA by April 17 [corrected date], 2018.
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