Elegible amount to be contributed to a Roth
I have a client with AGI of $ 10,213, and he is under 50. After the standard deduction has taxable income of 0. Does it go by AGI or taxable income? if AGI, then can he do the whole $ 6,000?
I have a client with AGI of $ 10,213, and he is under 50. After the standard deduction has taxable income of 0. Does it go by AGI or taxable income? if AGI, then can he do the whole $ 6,000?
Permalink Submitted by Alan - IRA critic on Wed, 2020-03-11 18:58
Neither. A contribution can only be made up to the amount of earned income such as W-2 wages or net income from self employment, subject to a maximum contribution of 6000. If filing jointly, the earned income of the higher earning spouse can be used to fund a contribution for the spouse with lower earned income (spousal contribution).
Permalink Submitted by Robert Roselli on Wed, 2020-03-11 19:02
He has 13,191 of W2 income and a capital loss carryforward of 3,000 bringing his AGI to 10,191. he has a standard deduction of 12,200 bringing his taxable income to 0. Can he do a Roth contribution and how much?
Permalink Submitted by Alan - IRA critic on Wed, 2020-03-11 19:26
Yes, he can make a full 6000 contribution. His earned income is not reduced by other losses or deductions.
Permalink Submitted by Robert Roselli on Wed, 2020-03-11 19:31
If his earned income was 6,000 and he had a capital loss carryforward of $ 3,000 brining his AGI to 3,000. What could he contribute in that scenario?
Permalink Submitted by Alan - IRA critic on Wed, 2020-03-11 19:39
6,000.