Wife retired in 2011 and I retired from the office in 2012 but still work part time as a consultant earning $30k last year. Processing our 2013 tax return and seeing that we owe more than I expected, due to missed withholding adjustment for last year... I plan to bump up my IRA for 2013. Wife requests, "me too!" Sorry dear you are retired and no income, pension, social security don't count... Not able to take my word for it and I've not found the appropriate IRS document. Would someone help with the confirmation? Thanx!!!
work part time as a consultant1099 or W-2 ?
I did receive a 1099 from 1 client, non from 2 others as charges were less than $500. I'm a sole proprietor.
Sorry dear you are retired and no income, pension, social security don't count... Not able to take my word for it and I've not found the appropriate IRS document. From Pub 590 concerning traditional IRAs"You can open and make contributions to a traditional IRA if: You (or, if you file a joint return, your spouse) received taxable compensation during the year..."I think you are wrong and she is right. OTOH, if your income is Schedule C: "If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deduction allowed for the deductible part of your self-employment taxes."you may be overestimating what you can contribute.
If your income is via a 1099MISC, then you are probably filing a schedule C. If so, take a look at line 31. Assuming you're not using any of this to contribute to a retirement plan, then the max you may contribute to an IRA or IRAs (if more than one) is the lesser of [line 31 - 1/2 SE Tax] or $6,500 per individual, assuming you are 50 or older.If you are married filing jointly and your AGI is under $95,000 then you may make a deductible traditional IRA contribution for yourself...and...under the rules relating to a spousal IRA, a deductible TIRA contribution for your spouse. You have until April 15 (next week) to designate this contribution to 2013. You may do the same for 2014 if you have sufficient income as described above for 2014.You don't give your age, but if you or your spouse are 70.5 or older, you may not make a contribution to your TIRA(s). But if your AGI is under $178,000, you may make a non-deductible contribution to your Roth IRA(s).BruceMAuthor: "IRA:A Quick Reference Guide"
BruceM is correct.Follow his advice.buzman
Please FA my post if it is incorrect. I thought using the IRS pub was the way to go.
Thank-you! Appreciate the responses - we are 66 & 67, and she's smiling!!
ReallyalldoneNot sure what FA'ing is....But you are correct, Pubs 590 and 560 are indeed the way to go on such questions.However, those who don't use these with any regularity, I've found, are a bit intimidated by them and so either won't read them or will only read a small part and get discouraged.So I find it fun to extract, concentrate and re-present the important material...hence my recent e-book on this subject.Because I'm pretty much retired from direct client work, this is how I keep the brain cells active :-)BruceM
So I find it fun to extract, concentrate and re-present the important materialBut the concern for me with that and with TMF information which is not dated is that it can become outdated and incorrect. I know you can update but it's still a concern when I am putting out info for other people.
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