ROTH IRA and Dividends

Submitted by Don Warnke on Mon, 2019-03-11 02:31

owner of S corp. draws W-2 income and dividends from his business. when determining ROTH IRA contribution limits, are the dividends counted toward AGI or only W-2?



Submitted by William Tuttle on Mon, 2019-03-11 05:46

  • It depends what you are referring to when you are talking about contribution limits.
  • Only W-2 wages are considered compensation required for IRA contributions.
  • Both an S-Corp shareholder employee’s W-2 wages and distributions are considered ordinary income included in your AGI and Roth MAGI for Roth contribution income limits.

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