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Old 03-01-2014, 09:35 PM
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Max IRA Contribution, 0?

Hi Gurus
Thanks for reaching and the help, in advance.
I only had a bit income this year (3800$) which I only found out when I got my 1099-G.
I thought I could put it IRA ( probably good time to start saving). As I am trying to file (using one of the free sites) I found out that my max limit for IRA contribution (till April 2014) for 2013 is Nada (0).
Found out that contributions can not be more than earnings.
So my question is my earnings are 3800$. What can I do to put that in IRA instead of wasting on you-know-what?

Any pointers help would be greatly appreciated.

Regards
N00b.



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Old 03-02-2014, 01:13 PM
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Re: Max IRA Contribution, 0?

Hi Folks
Found out that IRS though consider Unemployment Benefits as taxable income, but not earned income. Go IRS!!!

What is Earned Income?

Regards
Noob



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Old 03-02-2014, 02:46 PM
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Quote:
Originally Posted by N00b View Post
#1;I thought I could put it IRA ( probably good time to start saving). As I am trying to file (using one of the free sites) I found out that my max limit for IRA contribution (till April 2014) for 2013 is Nada (0).
Found out that contributions can not be more than earnings.



#2;So my question is my earnings are 3800$. What can I do to put that in IRA instead of wasting on you-know-what?

Any pointers help would be greatly appreciated.

Regards
N00b.
#1;correct; IRA Contribution Limits is the smaller of $5,500 ($6,500 if you’re age 50 or older), or your taxable compensation for the year.as your income $3.8k and your taxable income is $0 so $0 ira contribution




#2; I guess your income in 1099g is not earned income.If you owe no income taxes, you should consider contributing to a Roth IRA for your retirement fund; It is possible to have earned income without owing any federal income taxes, or even without have having to file an income tax return. You do not have to file an income tax return just because you are contributing to a Roth IRA. As of 2011, to contribute to a R-IRA, you do not need to owe taxes; you need to have earned income for the year;Earned income is money you receive for services you perform, such as the wages you earn at your job. Your earned income must be equal to, or greater than, the amount that you contribute to your R-IRA. For example, if your annual contribution limit is $5k, but you only have $3.9k in earned income, the most you can only contribute to your R-IRA is $3.9k. If you do not owe any taxes, but still contribute to a R- IRA, it is likely that, as of 2011, your agi income will be low enough to qualify you for the retirement savings credit. In order to claim this credit, you must file a tax return. However, this credit is non-refundable, meaning that it will not lower your tax liability below zero, so if you have no other refundable credits, it will not affect your tax liability, However, if your tax liability is zero because you claimed some refundable tax credits, you will be able to receive a refund if you claim the retirement savings credit as well.



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Old 03-02-2014, 08:40 PM
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Join Date: Mar 2014
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Wnhough
Thanks for the detailed reply.
As you mentioned the monies is 1099-g (unemployment benefits) so I can not deposit it into a Roth or traditional IRA as thats the only *income* I had in 2013.

Thanks again for your response.

Regards
N00b



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