Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120796  
Subject: Re: royalty to earned income Date: 3/16/2011 1:46 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 5
can anyone think of a way to convert some royalty income to earned so it can be placed in ROTH 403s or similar.

Royalty income is not earned income, and cannot be 'converted' to earned income. However, if the couple is employed and eligible for retirement plans through their employment, they can use royalty income for living expenses and contribute employment income to the retirement plans. Additionally, if there is earned income from employment, they can contribute to IRAs for each of them. The type of IRA (deductible, Roth, non-deductible) that they would be eligible to contribute to can be determined based on IRS Pub 590.

If there is no earned income, then the royalty income can always be invested in taxable accounts. Just because it doesn't say "IRA", "401(k)", "403(b)" or some other "retirement" designation doesn't mean that it can't be money for retirement. In fact, for many people, it's a good strategy to have at least some of their retirement money in taxable accounts, so that they can structure their retirement income to pay the least amount of tax possible.

AJ
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Berkshire Hathaway

Reestablishing the Middle Class
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement