Effect of Lottery winnings on Roth income limit
Are lottery winnings (unearned income) included in an individual’s income for the the purposes of determining whether or not their income exceeds the Roth contribution income limit.
Are lottery winnings (unearned income) included in an individual’s income for the the purposes of determining whether or not their income exceeds the Roth contribution income limit.
Permalink Submitted by Alan Spross on Wed, 2011-03-30 20:50
Yes, gambling winnings are included in modified AGI, so even if the taxpayer could itemize offsetting losses to reduce taxable income, this would not change the modified AGI, which could be pushed over the limit for making a regular Roth contribution. Of course, there is no longer an income limit for conversion to a Roth IRA or for making a non deductible contribution to a traditional IRA.