Self Employed

Traditional Individual Retirement Accounts

Self-employed individuals have different rules and products for retirement saving.

You can establish a traditional IRA whether or not you are covered by any other retirement plan.  But, your contribution may not be deductible if you or your spouse are covered by an employer’s qualified employer retirement plan, such as a Keogh plan.  You and your spouse (if you file jointly) can each contribute up to $4,000 per year to an IRA, assuming you have $8,000 in taxable compensation (earnings) between you.  Wages or net earnings from self-employment can serve as the basis for an IRA contribution.  If you and your spouse’s earnings are less than $8,000, the IRA contribution cannot exceed the respective earnings in that year.  

You are eligible to make a traditional IRA contribution each year as long as you’re under age 70 1/2 by the end of the year.  You can wait as long as until April 15th of the following year (tax deadline day) to open an IRA account and make your annual contribution.  The earnings in your IRA will not be taxed until distributions are made.