How much do you have to work to contribute to an ira?

Earned income is a requirement to contribute to a traditional IRA, and your annual contributions to an IRA cannot exceed what you earned that year. The contribution limit is independent of any other retirement plan that you or your wife may cover, such as a 401 (k) plan. These other retirement plans affect your ability to deduct your contribution for tax purposes, but they don't affect your ability to contribute. Anyone with sufficient earned income can contribute to an IRA, and you can even use it to buy physical gold. It may not be a deductible contribution, but a contribution can be made.

That leaves many other sources of income that DON'T qualify. For example, items you find on a 1099-INT or 1099-DIV, such as interest income and dividends from stocks or other investments, don't qualify. Rental income and capital gains from the sale of investments or properties are not counted. Neither do pension payments, profit sharing, IRA distributions, or distributions from retirement accounts or annuities.

Also excluded are Social Security, deferred compensation, unemployment compensation, child support, disability insurance income, and life insurance income. If you contribute more than allowed, an “excess contribution” has occurred and will need to be corrected. If you have any questions for Dan, send him an email with “MarketWatch Q&A” in the subject line. These are the lessons I learned about how to prepare, what to bring, what to buy and how to make it work.

Dan Moisand is a MarketWatch contributor and financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida. Visit a quote page and the recently viewed tickets will be displayed here. Yes, you can contribute to an IRA for your unemployed, non-working spouse who files a joint return, but your combined total contribution cannot exceed your combined taxable income or double the annual IRA limit, whichever is less. If you make too much money, you may still be able to contribute to a Roth IRA through a strategy called a clandestine Roth IRA.

Yes, a person under 18 can contribute to a Roth IRA or a traditional IRA as long as they meet earned income requirements and do not exceed income limits. The penalty for leaving an excess contribution in an IRA or Roth IRA is 6% of the deductible for each year the excess remains in the account.