Solved

I want to make a spousal Roth IRA contribution this year. My only earned income is consultant work of about $8000 with $4000 of expenses. wHat limit to my contribution?

Forum|Forum|2 years ago
December 12, 2023
2 replies
0 views

I have over $300k in MAGI income, almost all due to IRA to Roth IRA conversions.

TurboTax Online

Best answer by dmertz

@Opus 17 , MAGI for the purpose of a Roth IRA contribution does not include the taxable amount of Roth conversions.

@lsrosenb , if your net income from self-employment is $4,000, your net earnings from self employment are $3,717 after subtracting the deductible portion of self-employment taxes of $283, so $3,717 is the amount of compensation you have that can support a Roth IRA contribution.

You haven't said whether or not your spouse has compensation and whether you intend on making the spousal contribution for you or instead on behalf of your spouse. A spousal contribution is only permitted to be made by or on behalf of the spouse with the lower compensation. The spouse with the lower compensation can use the other spouse's compensation to make a spousal contribution, but that reduces the amount of compensation that the spouse with the higher compensation has to support their own contribution.

O

Opus 17

Employee

It appears that neither you nor your spouse can make any Roth contribution this year due to your high MAGI.

https://www.irs.gov/retirement-plans/amount-of-roth-ira-contributions-that-you-can-make-for-2023

D

dmertzAnswer

Employee

@Opus 17 , MAGI for the purpose of a Roth IRA contribution does not include the taxable amount of Roth conversions.

@lsrosenb , if your net income from self-employment is $4,000, your net earnings from self employment are $3,717 after subtracting the deductible portion of self-employment taxes of $283, so $3,717 is the amount of compensation you have that can support a Roth IRA contribution.

You haven't said whether or not your spouse has compensation and whether you intend on making the spousal contribution for you or instead on behalf of your spouse. A spousal contribution is only permitted to be made by or on behalf of the spouse with the lower compensation. The spouse with the lower compensation can use the other spouse's compensation to make a spousal contribution, but that reduces the amount of compensation that the spouse with the higher compensation has to support their own contribution.

L

lsrosenbAuthor

Thanks for the detailed reply. Yes, I am the only earner, but want to make the contribution to my wife's Roth IRA.

Very helpful detail and explanation.

L

lsrosenbAuthor

Thanks for the replies. The answer is that yes we can make the Roth ira contribution up to the net income less half social tax due. The high magi is not limiting, because according to irs form, ira conversions to Roth ira gets excluded for magi calcs for Roth ira contribution purposes. Thanks all.