will I qualify for Roth IRA in 2020

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carminered2019
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Joined: Fri Jun 21, 2019 7:06 pm

will I qualify for Roth IRA in 2020

Post by carminered2019 »

In year 2020 my only income will be building rental with LLC partners with K-1 filing roughly around $45,000. Will I be able to continue to contribute 6k for me and 6k for my wife in 2020 ?
snailderby
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Joined: Thu Jul 26, 2018 11:30 am

Re: will I qualify for Roth IRA in 2020

Post by snailderby »

IRS Publication 590-A states that compensation generally includes "self-employment income," "provided your personal services are a material income-producing factor," but not "[e]arnings and profits from property, such as rental income," or "[ i]ncome from a partnership for which you don’t provide services that are a material income-producing factor."
Last edited by snailderby on Wed Dec 11, 2019 9:11 am, edited 1 time in total.
alfaspider
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Re: will I qualify for Roth IRA in 2020

Post by alfaspider »

If you are uncertain, just do a backdoor Roth. It's only slightly inconvenient.
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Eagle33
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Re: will I qualify for Roth IRA in 2020

Post by Eagle33 »

alfaspider wrote: Tue Dec 10, 2019 5:07 pm If you are uncertain, just do a backdoor Roth. It's only slightly inconvenient.
OP still needs to have taxable "compensation" to do either a direct or backdoor Roth contribution.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
Topic Author
carminered2019
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Joined: Fri Jun 21, 2019 7:06 pm

Re: will I qualify for Roth IRA in 2020

Post by carminered2019 »

if I don't qualify for IRA then it's better just to invest in taxable account with extra money and stay in the 12% tax bracket with 0 tax on long capital gain. Is this logic better TIRA contribution ?
Last edited by carminered2019 on Tue Dec 10, 2019 10:32 pm, edited 1 time in total.
boglenomics
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Re: will I qualify for Roth IRA in 2020

Post by boglenomics »

alfaspider wrote: Tue Dec 10, 2019 5:07 pm If you are uncertain, just do a backdoor Roth. It's only slightly inconvenient.
+1, I am uncertain for 2020 as well and decided to wait until December 1st to make my contribution because I'll have a better idea of if I'll be over the limit or not then compared to a January contribution.
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MP123
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Re: will I qualify for Roth IRA in 2020

Post by MP123 »

boglenomics wrote: Tue Dec 10, 2019 10:07 pm
alfaspider wrote: Tue Dec 10, 2019 5:07 pm If you are uncertain, just do a backdoor Roth. It's only slightly inconvenient.
+1, I am uncertain for 2020 as well and decided to wait until December 1st to make my contribution because I'll have a better idea of if I'll be over the limit or not then compared to a January contribution.
My understanding is that the OP has no earned income. That would prevent them from making the initial tIRA contribution and the backdoor Roth maneuver in general. A Roth conversion might still be a possibility.
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