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Old 04-12-2018, 06:44 PM
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Can Hobby income be used to contribute to a ROTH?

I have a quick tax question that I have been unable to answer via the IRS website.

If ones only ?earned? income is from a hobby can that $ be contributed to a ROTH?

I understand that one can only contribute ?earned? income towards a ROTH but I cannot determine if hobby income is indeed considered ?earned? income.

The money is a 1099-MISC and from one person representing 3 separate days of activity over the year. Primary income otherwise is retirement distribution.

I've searched for weeks but cannot find a definitive answer. Any insight would be greatly appreciated. Thanks.



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Old 04-12-2018, 11:19 PM
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If ones only ?earned? income is from a hobby can that $ be contributed to a ROTH?=========>yes. hobby income is also a sort of earned income; as you can see, generally speaking, you MAYcontribute to a R-IRA ONCE you have your TAXABLE earned INCOME and your MAGI is less than certain levels;as you know even your hobby income needs to be reported on your 1040 as part of your AGI/MAGI/TI.


I understand that one can only contribute ?earned? income towards a ROTH but I cannot determine if hobby income is indeed considered ?earned? income.=====>as mentioned above; Income from wages, salaries, tips and other forms of taxable pay when working for someone else are earned income. Self-employment income also is earned income. Long-term disability benefits received prior to minimum retirement age is also earned income according to IRS;however, retirement pensions, Social Security payments, interest and portfolio income such as dividend income, unemployment benefits, and alimony and child support. Unemployment benefits are also not considered earned income.



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Old 04-16-2018, 12:57 AM
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Quote:
Originally Posted by Wnhough View Post
If ones only ?earned? income is from a hobby can that $ be contributed to a ROTH?=========>yes. hobby income is also a sort of earned income; as you can see, generally speaking, you MAYcontribute to a R-IRA ONCE you have your TAXABLE earned INCOME and your MAGI is less than certain levels;as you know even your hobby income needs to be reported on your 1040 as part of your AGI/MAGI/TI.


I understand that one can only contribute ?earned? income towards a ROTH but I cannot determine if hobby income is indeed considered ?earned? income.=====>as mentioned above; Income from wages, salaries, tips and other forms of taxable pay when working for someone else are earned income. Self-employment income also is earned income. Long-term disability benefits received prior to minimum retirement age is also earned income according to IRS;however, retirement pensions, Social Security payments, interest and portfolio income such as dividend income, unemployment benefits, and alimony and child support. Unemployment benefits are also not considered earned income.
Thank you for taking the time to respond. I really appreciate it.



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