Question

I have Schedule C income of $28,298 and Schedule E income of $11,980 and Turbotax is calculating my combined earned income is just $4,495 and that we have excess Roth

Forum|Forum|3 years ago
February 16, 2023
3 replies
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Why is turbotax saying my husband and I's Roth IRA contributions of $14,000 is in excess by $7,000

TurboTax Online

In order to contribute to a Roth IRA, you must have earned income, with the exception of Spousal IRA rules that allow the spouse without compensation to contribute as long as their spouse has earned income.

Examples of earned income include:

Wages
Salaries
Tips
Bonuses
Taxable fringe benefits
Net earnings from self-employment
Untaxed combat pay
Military differential pay
Taxed alimony

Earned income does not include things such as welfare payments, untaxed alimony, child support, unemployment, workers’ compensation benefits, pensions, Social Security payments or payments from rental properties.

Please see this article for more information.

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esserla1466Author

Why doesn't my schedule c income count as self employment?

M

Mike9241

are either of you covered by an employer plan? there should be a worksheet in the Turbotax file that shows the computation. we can't see your return. contact support and review IRS PUB 590-A because you have not supplied enough info for us to determine whether it's a Turbotax issue or not

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esserla1466Author

No we are covered under an employer retirement plans. My Adjusted Gross income on line 11 of 1040 is $43,898. I checked through the PUB 590-A on the Roth IRA contribution limitation calculation and using this formula, my Adjusted gross income would still be line 11 AGI of $43,898, therefore TurboTax is calculating my combined earnings for Roth IRA limitation incorrectly.

T

ThomasM125

Probably what is happening is that you are assigning the IRA contributions to one of you rather than splitting it between you. You can each contribute $7,000 to an IRA. But neither of you can contribute more than that.

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