Roth IRA contribution now with only earned income later in the year?
I have a question on a teenager starting a Roth IRA.
They are 17 years old and will have earned income later in the summer. However, currently they have no earned income. Are they able to make the Roth contribution now with no current income as long as they have earned income at some point this year? Or do they need to wait?
Thanks.
Permalink Submitted by Alan - IRA critic on Mon, 2020-03-30 00:22
The contribution can be made anytime in the year including prior to the income actually being earned. If the income is never earned in 2020, the contribution will become an excess contribution and will have to be removed with allocated earnings or less any loss to avoid a 6% excise tax.