I have been living abroad for several years now, but while I was in the States, I started a Roth IRA. I would like to start contributing again, but I'm not sure how exactly to go about it. My salary is paid by a non-U.S. company, and is deductable via the 2555-EZ form, so I'm assuming it doesn't fall under the category of taxable earned income. Would I just deduct all of my salary but the portion that I contribute to the Roth IRA?
Thanks for any thoughts or answers.
Update I'm adding information that I think is relevant to my question from http://www.irs.gov/publications/p590/index.html. I have removed what I consider to be excess information.
- From chapter 2:
Generally, you can contribute to a Roth IRA if you have taxable compensation...
- From chapter 1:
What Is Not Compensation?
Compensation does not include any of the following items.
- Earnings and profits from property, such as rental income, interest income, and dividend income.
- Deferred compensation received (compensation payments postponed from a past year).
- Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs.
So by the second point in 2., it would seem that I can't count income from previous years, otherwise why have a deferred income exception. Also, by the first point, if I can't contribute interest/dividend income, then I'm not sure if I could prove that my contribution is coming from "compensation" from a previous year. However, I'm not sure if I'm able to exclude only part of my foreign earned income so as to be able to contribute, and if I can, how to go about doing so.