Among Friends

[151949]

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@Carmie wrote:

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@151949 wrote:

It was not taxed before it went into the IRA - that is the whole point of using an IRA.

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@151949 wrote:

It was not taxed before it went into the IRA - that is the whole point of using an IRA.

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If she has a Roth IRA she paid taxes before she invested it.  She will not pay taxes on the principal when she withdraws it, only on the interest.

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So she still is not paying taxes twice as she is stating.You only pay the taxes once either way.

[hckynut]

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@Mom2Dogs wrote:

Does anyone know if  Social Security is considered earned income?

Thanks.

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@Mom2Dogs

As for your question, beats me. I can tell you the only deduction from my SS checks are the now $110 per month for Medicare. I began drawing my SS at age 62. I have no idea what others choose to do, or what is withheld from their SS.

hckynut(john)

[millieshops]

@Mom2DogsHope your advisor can come up with an idea.  It's not going to be SS though -  and your age doesn't matter.

One thought to ask -  I think you mentioned DH has a business???  If he hires you, that's earned income and then you might be able to qualify for an IRA, but ask carefully both about the legality and about whether more IRA makes sense at this time of your life.   Remember - to0day's income tax is probably less than it will be by the time you have to start  drawing down your IRA's.

Someone who knows more about your situation than I know needs to help you decide!  

[millieshops]

@Annabellethecat66It's probably way worse than you think it is!  The very rich lobby Congress to get the loopholes that they want to use -  and then they use them.

And, yes, the wealthy do pay a huge share of the cost of government, but since they earn an even greater share of the money available in our great country, I'm not crying for what they have to pay.

Maybe I told this story before???  Years ago, my mother was appalled by the amount of money my younger brother had to pay one April -  after all, she said, he'd been paying estimated taxes as the year had progressed.  She told me what he still owed and when she did, I asked "Do you want me to feel sorry for him?"  Sure she did. 

I told her that April payment was more than I was earning all year long and definitely did not feel sorry for him. 

[Mom2Dogs]

Good morning @millieshops....yes my (we) are self employed...it is just a 2 person business.  I do work in the business but do not draw a 'formal income' as of this year.

We have been trying to think of what we can do to recoup the deduction we have been getting from my yearly contributions...I don't think there is any thing else that will give us that deduction, but it is on the list of things to discuss as our meeting next month.  thanks for your input.

[Josefina]

No it is not earned income.

[Josefina]

It happened to me also, once you retire you have pensions but not earned income and therefore can not contribute to a deductible IRA. I do believe you can contribute to a non deductible IRA. Check with your accountant.

[Allegheny]

@Mom2Dogs

From the brief amount of reading I have been doing, a spouse with unearned income may be able to contribute their working spouse's IRA, but...as I read there are many IRS rules for qualification.

Your financial advisor should be able to research whether this is a possibility you & your husbands situation.  

[kitty60]

You can contribute to a spousal IRA as long as your husband has enough income.  I believe they changed the law, at one time it had to be a new IRA for you but it can no go into your existing one.  There are also some phase out rules for deductiblity, etc. Your accountant will be able to advise you on this.