Can I contribute to an IRA before April 2019 to reduce taxable income if I was retired in 2018 but received a royalty?

Feb 13, 2019

I was retired in 2018 and would like to contribute to an IRA before April 2019 to reduce taxable income. Would a royalty payment for a publication in 2018 be considered earned income under IRS guidelines?

It sounds like you can contribute, and you’ll know as soon as you enter the royalty income (I presume it’ll be supported by a 1099) and all other income and deduction information. The last thing you’ll enter is the IRA contribution, and then you (or the software you’re using) will have to compute how much you can contribute to a traditional IRA for maximum deduction.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Jennifer L. Romberger, CPA, EA, is with Long Financial Group Inc. in Blue Bell, Pa.

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