Please clarify earned income for an independent contractor re: making a Roth IRA contribution

[psychopengy]

I'm an independent contractor being paid by one company. My 1099-NEC from them was for $7,507.00. I also earned $135 from another entity for a one-time project . I assumed that $7,642.00 was my earned income, and that I could make a Roth IRA contribution in that amount (I'm 69 y.o.), however, Turbo Tax apparently reduced my earned income amount by my business expenses ($515) and one-half of my self-employment (Soc. Sec.) taxes ($494) so I can only make a contribution of not more than $6,633. I referred to IRS publication 590 (IRA contributions) and it states that: 

If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: 

The deduction for contributions made on your behalf to retirement plans, and 

The deduction allowed for the deductible part of your self-employment taxes. 

It doesn't mention anything about other business expenses. But I assume that net earnings also means income less business expenses? I just want to make sure. Funny that it doesn't mention the self-employed health insurance deduction. Thanks

[VolvoGirl]

Yes that’s right.  Net earnings and your earned income is the Net Profit on Schedule C after all expenses.  

[SusanY1]

Yes, net earnings means the income less the business expenses.  

The self-employed health insurance deduction doesn't reduce your net earnings from business, but is instead an above-the-line deduction from your taxable income (which is a little different, as you learned from Publication 590, from your taxable compensation.)

 

[Bsch4477]

Correct, it is net earnings and reduces by the deductible portion of self employment tax.  Self employed health insurance is not mentioned because it is an adjustment to income not related to your Schedule C.