Roth IRA contribution. Gross amount or after taxes amount?

[Guest Donna722]

My college age son "grossed" $900 this year and, let's say $100 was withheld in taxes. Can he contribute the full $900 to a Roth IRA or only the $800 "after taxes" amount?

Thanks ahead of time for sharing your expertise. This is my first attempt at a message board, hope it makes sense. I'm mostly cofused -- this is the third time I'm typed this message. (And what are all those antimated icons about, anyway? Nevermind.)

[BPickerCPA]

He can contribute the total wages, which is the gross amount.

Hope this helps.

[Guest Mary Ann]

Yes, he can contribute the entire amount of compensation (up to a maximum of $2,000) so the $900 can go into a Roth IRA (of course, that is if his entire adjusted gross income is under $150,000 - no problem I would guess.)

[John G]

The source of the funds can be mom, dad, grandparents, etc., the contributions do not need to come from the child.

[Appleby]

John, I understand your response, but some may mis-intrepret it to be the same rules as the education IRA. The cash that funds an IRA for anyone can come from anywhere or anyone. The requirement is that the person for whom the IRA is established must have compensation. The contribution can be 100% of comensation or $2,000, whichever is less.

I am not sure if FICA and FUTA ,social security and Fed tax would be assessed on such a small amount of earnings, but I assume that even it is was, that can be paid out of pocket. Hence, the individual may contribute the full $900 to his IRA