Rukh O'Rorke
Senior Associate
Joined: Jul 4, 2016 13:31:15 GMT -5
Posts: 10,018 
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Post by Rukh O'Rorke on Sept 12, 2019 12:04:19 GMT -5
How does it work with taxes?
If someone grosses only 5k for the year, can they do 5k Roth, even though some of the money from income goes to taxes?
Any different w2 vs 1099?
Thanks for any info!!
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oped
Senior Member
Joined: Aug 20, 2018 20:49:12 GMT -5
Posts: 4,676
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Post by oped on Sept 12, 2019 12:16:59 GMT -5
It’s based on Modified Adjusted Gross. Most people in that bracket are dependents. They likely have few adjustments anyway. Self employment tax is one thing added back in for modified adjusted gross, as far as 1099 adjustments.
My kids I always just put in whatever they made gross up to the limit. I can’t remember even paying attention to the rest. The accountant always noted it without concern.
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giramomma
Distinguished Associate
Joined: Feb 3, 2011 11:25:27 GMT -5
Posts: 21,277
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Post by giramomma on Sept 12, 2019 12:17:59 GMT -5
If someone has a 1099, I would look at a SEP or solo 401K to minimize the tax situation. I have a SEP (they didn't have solo 401Ks then) for my SE income. I don't put money in there now, because of the CTC and having a bazillion kids.
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oped
Senior Member
Joined: Aug 20, 2018 20:49:12 GMT -5
Posts: 4,676
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Post by oped on Sept 12, 2019 12:23:12 GMT -5
SEP contribution limits at that income level would be much lower than Roth.
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