Owner’s draw and is it considered earned income?
Spouse will begin working for husband’s business, and accountant suggested she take a draw vs salary. Everything I am locating is saying that an owner’s draw is NOT considered earned income for purposes of contributing to a Roth, and I wanted to get input to see if that is also your understanding?
Thank you!!!
Permalink Submitted by Alan - IRA critic on Fri, 2024-04-19 21:55
Yes, that is correct but she can use a spousal contribution using husband’s earned income to make her Roth contribution if they file jointly. Modified AGI limits apply however.