roth IRA?

[fistula]

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I worked for several years before starting med school and have some savings that I'd like to invest in a Roth IRA. Technically, I don't think I can invest more than I've earned this year. And since I'm in med school, I have zero earned income to report on my tax forms this year. Does this mean I can't legally invest in a Roth IRA?

 

[lord_jeebus]

You cannot contribute in a year that has no earned income

BUT

Did you make money last year? You have 10 more days (until April 15) to contribute to a Roth for 2008.

 

[travelbug73]

I worked for several years before starting med school and have some savings that I'd like to invest in a Roth IRA. Technically, I don't think I can invest more than I've earned this year. And since I'm in med school, I have zero earned income to report on my tax forms this year. Does this mean I can't legally invest in a Roth IRA?

Are you married, filing jointly? Do you have spousal income? If so, you can both contribute to the Roth IRA, even if you have had no income.

Or, as the previous poster asked, did you earn anything before you started school? If that is the case, you can contribute before the 15th of April, though you may or may not be able to max out depending on how much you made.

 

[AmyTam]

fistula, you should be able to. You can open a self-directed roth ira.
you can read up more about self-directed roth ira here: http://www.rothirarules.net/self-directed-roth-ira.htm
they have some good info on roth ira overall..

cheers

I worked for several years before starting med school and have some savings that I'd like to invest in a Roth IRA. Technically, I don't think I can invest more than I've earned this year. And since I'm in med school, I have zero earned income to report on my tax forms this year. Does this mean I can't legally invest in a Roth IRA?

 

[Sol Rosenberg]

No, you can't contribute to your Roth IRA more income than you earn ("unearned" income like interest, investments, etc doesn't count.) The only exception is if you are married and have a working spouse, your spouse can contribute for both of you.

On another note, one good thing about this current economic situation is that it has made Roth Rollovers even more attractive this year. As you might already know, it is possible to spread the tax burden out over a few years if the rollover is done this year. With market values so depressed, the tax burden is minimized even further. It's a good time to be a Medical Student with 401ks and IRAs that can be rolled over 🙂

EDIT: Actually, it is for rollovers in 2010 that allow you to do tax averaging over 2 years, so the timing isn't quite perfect (hopefully we will be out of this market slump by 2010.....)