4

So I am a student and will be making less than 6 thousand dollars this year, and so I'll be exempt from taxes. Can I use some of the money I make to contribute to a Roth IRA?

5

If by exempt, you're just referring to the fact that the income is less than your standard deduction and personal exemption, then yes, that money can be used to fund a Roth. Great time to do it.

To be clear, in 2014 the limit for an under 50 year old, is $5500 ($6500 if 50 or older). Only earned income may be used for deposits. No interest, dividends, etc.

  • It is worth emphasizing that IRA contributions are limited to the lesser of $5500 and the total "earned income" from salaries, wages, self-employment etc. This needs to be taken into account if any part of that < $6K is from interest or dividends etc. – Dilip Sarwate Aug 1 '14 at 2:02
  • Yes! Done. You are always welcome to edit my answers to add such clarifying remarks. Thanks, again. – JTP - Apologise to Monica Aug 1 '14 at 11:01

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.