plugginaway22
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Joined: Jan 2, 2011 10:18:42 GMT -5
Posts: 1,655
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Post by plugginaway22 on Apr 28, 2022 6:30:30 GMT -5
I have googled and cannot get a clear answer on this. DH and I retired end of 2021 and expected zero income for 2022. We are living off savings and doing a Roth conversion later this year (to keep income low enough to qualify for ACA).
DH got a random final paycheck in January of benefits that we were not expecting. The gross amount was $4200 and they withheld $1250 to his 401K. Since this will be only income for 2022, can we also contribute to his Roth IRA in the amount of $4200 (even though 1250 of it went to 401k)?
Thanks in advance.
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minnesotapaintlady
Junior Associate
Joined: Dec 9, 2020 21:48:27 GMT -5
Posts: 7,501
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Post by minnesotapaintlady on Apr 28, 2022 7:13:47 GMT -5
You can only contribute to your IRA up to the amount of earned income, not gross. Earned income from a W2 job would be the wages reported in box 1 of the W2. So, basically your gross minus any allowed pre-tax savings like 401K, HSA, insurance premiums...
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plugginaway22
Well-Known Member
Joined: Jan 2, 2011 10:18:42 GMT -5
Posts: 1,655
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Post by plugginaway22 on Apr 28, 2022 12:55:42 GMT -5
Ahh, makes sense I guess. Will do the $2950 for sure. Thanks!
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