What is earned Income?
Earned income is the salary or wages you receive as an employee. If you are self-employed, earned income is your net income for personal service performed for the business. All taxable alimony is considered earned income. Passive income such as interest, dividends and rental income is not considered earned income for purposes of funding an IRA.
Earned income includes all the taxable income and wages you get from working. There are two ways to get earned income: * You work for someone who pays you, or; * You work in a business you own. Taxable earned income includes: * Wages, salaries, and tips; * Union strike benefits; * Long-term disability benefits received prior to minimum retirement age; * Net earnings from self-employment; * Combat Pay; * Nontaxable combat pay election.
Earned income includes all the taxable income and wages you get from working. There are two ways to get earned income: 1. You work for someone who pays you, or; 2. You work in a business you own. Taxable earned income includes: Wages, salaries, and tips; Union strike benefits; Long-term disability benefits received prior to minimum retirement age; Net earnings from self-employment.
