IRA contribution - sub-teacher & possible W2

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ps56k
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IRA contribution - sub-teacher & possible W2

Post by ps56k » Thu Sep 07, 2017 6:25 pm

Wife and I both retired... I did it very early, and wife early a year ago.
We stopped contributed to IRA the year after - as no "earned income".

SO... wife is bored, and has been doing some sub-teacher work this year within her old school district.
The pay slip appears to deduct the usual payroll items... so I'm guessing a W2 will be issued.

Just wondering if we can contribute to her IRA - the max of whatever the end of year payroll gross or net (?) will indicate ?
Might have to wait till 2018 and receive the W2 to make sure all the numbers match.
Not sure if we will make the $6,500 or even the $5,500 - will wait and see come December.

What about lonely me - if she has her "earned income" - can I also contribute the same amount to my IRA ?

tnx -
Last edited by ps56k on Thu Sep 07, 2017 6:33 pm, edited 1 time in total.

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Duckie
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Re: IRA - sub teacher & possible W2

Post by Duckie » Thu Sep 07, 2017 6:29 pm

ps56k wrote:What about lonely me - if she has her "earned income" - can I also contribute the same amount to my IRA ?
If MFJ you can contribute on her income, so if she makes more than $13K you both might be able to contribute the max.

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ps56k
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Re: IRA - sub teacher & possible W2

Post by ps56k » Thu Sep 07, 2017 6:38 pm

Duckie wrote:
Thu Sep 07, 2017 6:29 pm
If MFJ you can contribute on her income, so if she makes more than $13K you both might be able to contribute the max.
Have never run into the very low "earned income", so never thought about the IRA issue.
SO - whatever she has indicated as year end "earned income" is the MAX COMBINED for both of our potential IRA contributions...
hmmmm - say only $6,000 - wonder.... do we split it $3,000/$3,000, or put it all into one or the other account, the one with the lessor balance, etc -
Last edited by ps56k on Fri Sep 08, 2017 3:21 pm, edited 2 times in total.

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FiveK
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Re: IRA - sub teacher & possible W2

Post by FiveK » Fri Sep 08, 2017 12:10 pm

ps56k wrote:
Thu Sep 07, 2017 6:38 pm
hmmmm - say only $6,000 - wonder.... do we split it, put all into one or the other account, the one with the lessor balance, etc -
Do whatever makes you feel better. Assuming it's invested the same regardless of account, the monetary result will be identical.

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ps56k
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Re: IRA contribution - sub-teacher & possible W2

Post by ps56k » Tue Nov 14, 2017 1:20 am

but - just to clarify - we can only contribute the max of whatever is reported as income on the W2 - not double dipping -

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FiveK
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Re: IRA contribution - sub-teacher & possible W2

Post by FiveK » Tue Nov 14, 2017 1:57 am

ps56k wrote:
Tue Nov 14, 2017 1:20 am
but - just to clarify - we can only contribute the max of whatever is reported as income on the W2 - not double dipping -
Correct.

Note that if her pay is documented with a 1099-MISC instead of a W-2 (depends on whether she is an "independent contractor" or an "employee"), you have to subtract 1/2 of the self-employment tax from her net self-employment income to get "taxable compensation."

Your MAGI calculation for Roth IRA purposes is https://www.irs.gov/publications/p590a/ ... 1000230988

See more about "taxable compensation" at https://www.irs.gov/publications/p590a# ... 1000230355

ivk5
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Re: IRA contribution - sub-teacher & possible W2

Post by ivk5 » Tue Nov 14, 2017 2:02 am

No insight into rest of income/asset picture but you may want to consider Roth rather than traditional IRA contribution if current marginal tax rate is low and will increase in future due to RMDs etc.

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