What is the definition of earned income? What is the definition of adjusted gross income? My income for 1998 consists of short term disability from my employer, long term disability from my employer, social security disability, and investement income. Can I contribute to a 1998 Roth IRA? Can I convert my prior IRAs to Roths?
[[What is the definition of earned income? What is the definition of adjusted gross income?]]These questions can get pretty complicated. But, generally, earned income comes from work that you preform. This income is generally reported to you via Form W-2 or by filing Sch C. In some cases, you can receive earned income from a partnership.As far as AGI...that has different definitions for different purposes. For Roth IRA purposes, your AGI is your normal AGI, without regard for any increase in AGI caused by a Roth IRA contribution.[[ My income for 1998 consists of short term disability from my employer, long term disability from my employer, social security disability, and investement income.]]None of which, generally, meets the definition of "earned" income.[[ Can I contribute to a 1998 Roth IRA?]]Since you have no earned income, you would not be able to make a Roth IRA contribution.[[ Can I convert my prior IRAs to Roths?]]Earned income is NOT an issue with respect to Roth IRA conversions. The controlling number is your AGI.I provide some additional information on this and other Roth IRA issues in the Taxes FAQ area (archives section). You might want to check it out for some additional information.TMF TaxesRoyWant to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |