I am 61 years old and currently receiving Long term disability compensation from my company’s insurance company. Each year, the insurance company sends me a W2 form on the taxable compensation payout shown in Box 1. Can I use it to contribute to either an IRA or a Roth IRA
I have looked up on Google that I can contribute to an IRA since taxable income. But some other websites state “Can not”. So I have conflicting information. So What is the correct information
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I still do not have exact answer from the expert. Yes or No
Yes you can contribute to either a traditional IRA or a Roth IRA. Once you are 70 and 1/2 or older you can no longer contribute to a traditional IRA but you can still contribute to a Roth IRA. Here is a helpful link to the IRS page that explains this information.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-li... If you can't click on this link just copy it and paste it in your browser address bar.
The IRS claims the following are earned income:
If you are not yet retirement age for your company your disability is a substitute for wage income and can be used to contribute to a traditional or roth IRA. If you are of retirement age for your company your disability benefits no longer count as wages and can not be used towards contributions to an IRA.
Is 62 the minimum retirement age? If so, I can not contribute my taxable long-term disability compensation to my IRA when I reach that age.
Thanks
Wayneyee
Hello, Wayneyee!
1. Can you contribute to a Traditional IRA or a Roth IRA, based on your long-term disability income reported on your W2 in Box 1?
2. Is 62 the minimum retirement age?
For Additional Information on IRA's, please see the following:
Please feel free to reach backout with any additional questions or concerns you might have!
Have an amazing rest of your day!
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Hello, wayneyee!
In general, this depends on when you decide to start colecting your Social Security benefits. . Your benefit will be higher the longer you delay your start date. This adjustment is usually permanent.
Is 62 the minimum retirement age?
" I can not contribute my taxable long-term disability compensation to my IRA when I reach that age. "
For Additional Information on IRA's please see the following:
Please feel free to reach backout with any additional questions or concerns you might have!
Have an amazing rest of your day!
*Please say "Thanks," by clicking the thumbs up icon at the bottom of the post.
**Select the post that answers your question by clicking on "Mark as Best Answer.”
I can use my $57K long-term disability compensation income to contribute to my wife's IRA or Roth?
Thanks
Wayne
@wayneyee wrote:
I can use my $57K long-term disability compensation income to contribute to my wife's IRA or Roth?
Thanks
Wayne
No. You must have compensation from working to contribute to an IRA. Disability income is not compensation from working.
Go to this IRS website for Publication 590-A and on page 7 Table 1.1 shows what type of compensation is allowed for contributions to an IRA - https://www.irs.gov/pub/irs-pdf/p590a.pdf#page=7
As Terri Lynn indicated, the amount in box 1 of your W-2 minus any amount in box 11 is considered to be compensation that will support an IRA contribution. This compensation can also be used to support an IRA contribution made by your spouse if your spouse has lower compensation and you file a joint tax return.
Hi TurboTax Team.
From the previous answer from your team, I can contribute to an IRA or Roth. Please see the previous answer below.
1. Can you contribute to a Traditional IRA or a Roth IRA, based on your long-term disability income reported on your W2 in Box 1?
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