AlanKwiatkowski
Mar 11 1999, 01:42 AM
I'm attempting to determine the maximum contribution to a Roth for my self-employed son. He was 1099 (Misc.) for 2000 for modeling which is his total earned income (He had some dividends as well.) Can he contribute 2000 to a Roth? or can he only contribute his AGI? He must pay 283 in self employment tax which 142 (half) is deductible, reducing his AGI. Turbo tax seems to be using the AGI.
DAVETAX
Mar 11 1999, 12:28 PM
You must reduce your $2000 self employment income by 50% of your SE tax to arrive at your earned income. In your son's case his AGI and earned income is the same figure $1,858.
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DAVID SNYDER, CPA