IRA eligibility (farm income)
Good Afternoon
A couple of questions regarding farm income
Does an indiviudal that has farm income have to report it on Form 1040 Schedule F to be eligible to make a SEP and or T-IRA Contribution?
Is there any type of farm income that would not be considered earned income?
Thank you
Permalink Submitted by Alan - IRA critic on Fri, 2013-04-26 01:30
Generally, yes particularly for a SEP contribution. But there are certain farm ownership entities that would not file Sch F. Sch SE typically goes with Sch F to report the SE tax and determine the allowed SEP contribution. Most all farm income reported would be earned income for TIRA contributions. A gray area exists for small family gardens that sell small amounts they don’t need with respect to Sch F, but if the income is reported it would be earned income for TIRA or SEP contribution purposes.