Hello, I am a pharmacist and worked for almost 25 years for a big box retail pharmacy. I finally pulled the plug and decided to take a sabbatical earlier this year so that I could spend some much-needed quality time with my beautiful wife (homemaker) and 2 young boys, 11 and 16.
I have the following question concerning IRA contribution as I have not come across an answer to a similar question. on Since I took a sabbatical earlier this year, I received W-2 paycheck income only for the first 2 months (Jan/Feb 2024). I wanted to take advantage of tax benefits and employer match of my 401-k contributions so contributed almost 75% of my pre-tax income to the 401-k offered by my company for those 2 months. My W-2 net income after taxes, pre-tax 401-k contribution, and other deductions was $7600/- and my gross income was $22,560/- (the amount on which FICA and Medicare taxes were deducted). I wanted to know if my wife and I can make full allowed contributions to either a Roth IRA or a traditional deductible IRA for the year 2024 (my contribution of $8000, as will turn 50 this year, and my spousal IRA contribution of $7000). What should be considered as earned income for us in this case, $7600 (net pay) or $22,650 (gross pay) for IRS earned income calculation? I wanted to take advantage of the maximum allowed contribution for the year 2024. I would appreciate a response to this question or if you can refer me a to a similar post or resource. Thank you.
[This post has been split from an old thread and started as a new topic. The older thread is at viewtopic.php?t=230585, but this post is a new different situation. Moderator Pops1860]
I have the following question concerning IRA contribution as I have not come across an answer to a similar question. on Since I took a sabbatical earlier this year, I received W-2 paycheck income only for the first 2 months (Jan/Feb 2024). I wanted to take advantage of tax benefits and employer match of my 401-k contributions so contributed almost 75% of my pre-tax income to the 401-k offered by my company for those 2 months. My W-2 net income after taxes, pre-tax 401-k contribution, and other deductions was $7600/- and my gross income was $22,560/- (the amount on which FICA and Medicare taxes were deducted). I wanted to know if my wife and I can make full allowed contributions to either a Roth IRA or a traditional deductible IRA for the year 2024 (my contribution of $8000, as will turn 50 this year, and my spousal IRA contribution of $7000). What should be considered as earned income for us in this case, $7600 (net pay) or $22,650 (gross pay) for IRS earned income calculation? I wanted to take advantage of the maximum allowed contribution for the year 2024. I would appreciate a response to this question or if you can refer me a to a similar post or resource. Thank you.
[This post has been split from an old thread and started as a new topic. The older thread is at viewtopic.php?t=230585, but this post is a new different situation. Moderator Pops1860]
Statistics: Posted by MCD2000 — Tue Aug 27, 2024 8:41 am — Replies 2 — Views 155