Question

Can I contribute to an IRA if I pay self-employment tax but not income tax?

Forum|Forum|2 years ago
August 30, 2023
1 reply
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I live overseas and generally don't have to pay income tax due to the Foreign Earned Income Exclusion. However, this year I will be filing as a self-employed person and paying the self employed tax. Can I contribute to an IRA? Previously I could not because all my income was excluded and I was not paying taxes, so I am wondering if my situation changes now.

Ask the Experts - Self-Employed - Aug 2023

Q

quorumof1

Hi There

Since you anticipate paying self employment tax that is a sure sign that you have earned income which will make you eligible to contribute to an IRA. But FYI, an IRA deduction could lower Federal Income Taxes, but it will not lower self employment taxes.