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EBC2024
Level 2

Sole Proprietor and Roth IRA

Is the profit I make selling products as a sole proprietor eligible to be used into a Roth IRA? My limited understanding is that deposits into a Roth IRA has to come from ‘earned income’. We don’t issue ourselves a W2, we simply take the profit, make Estimated Federal tax payments quarterly and just want to maximize the best use of profits.

Many Thanks.

1 Comment 1
MelroseV
QuickBooks Team

Sole Proprietor and Roth IRA

Hello there, EBC2024.

 

IRAs allow you to make tax-deferred investments to provide financial security when you retire. 

 

There are some qualifications and requirements for the Roth IRA. You can check this website for more details about it: https://www.irs.gov/retirement-plans/roth-iras.

 

Please note that QuickBooks Community is unable to provide information on the eligibility of a Roth IRA. I recommend reaching out to your accountant or the IRS. They're the right people who can answer this kind of questions.

For future use, here's a guide on paying your federal estimated taxes each quarter: Pay federal estimated quarterly taxes in QuickBooks Self-Employed.

 

If you have other concerns besides the Roth IRA, please don't hesitate to post them here in the Community space.

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