I have a client in his 80s. He is married and files joint with his wife. Their MAGI is usually around $130,000. He has a part time job that pays him very little. His 2023 w-2 from that job notes $7,838.05 in box 1. According to his 2023 w-2, he had about $23 withheld on this for federal taxes, about $486 for Social security tax, about $114 for Medicare tax and about $6 for state income tax.

What is his maximum 2023 Roth IRA contribution? I know it is the lesser of $7,500 or earned income. His earned income was over $7,500 but I don’t know if you have to net out all the withholdings from the $7,838.05 on box 1 of his w-2 to get to the max amount he can put into a Roth IRA. If so, this would drop his maximum IRA contribution to $7,208.95.