Re: Roth IRA questions..
 

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You cannot deposit money that you have made from poker, correct?

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Yes you can. As long as you pay taxes on it.

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You're right, you can deposit money even if you have $0 earned income, but you will be penalized heavily. I believe something like 6%.

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Wait, could someone elaborate on this? I always thought you couldn't put any money in a Roth if you had no earned income. Would it then be worthwhile for someone like me (I have zero earned income for 2006, but I will be paying taxes on my poker winnings) to put $4k in a Roth?

Re: Roth IRA questions..
 

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if you are around 20 and put $4K in every year for the next 4 years, and never touch it again, you should easily have $1M by your early sixties.

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Which will be about $250k in today's dollars (and not enough to retire).

Re: Roth IRA questions..
 

Is the deadline Dec 31 to put money in or do you get some time in 07 for the 06 contributions?

Re: Roth IRA questions..
 

So it looks like I have until tax day to contribute for 06, correct? One thing I haven't found out is how easy is it to move from one type of investment to another? Say I don't have the time at the moment to check out stock/mutual fund options and just open a Roth IRA CD at my credit union. When it matures in 6 months how easy is it to move that money to say Ameritrade or some other online investment place? I'm guessing I don't have to keep it in my bank forever. Is there a good place with answers to these types of questions? I've been reading up today but there are a million sites with Roth info and I've only read a couple so far.

Re: Roth IRA questions..
 

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You cannot deposit money that you have made from poker, correct?

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Yes you can. As long as you pay taxes on it.

[/ QUOTE ]

You're right, you can deposit money even if you have $0 earned income, but you will be penalized heavily. I believe something like 6%.

[/ QUOTE ]

Wait, could someone elaborate on this? I always thought you couldn't put any money in a Roth if you had no earned income. Would it then be worthwhile for someone like me (I have zero earned income for 2006, but I will be paying taxes on my poker winnings) to put $4k in a Roth?

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Please somebody elaborate on this. I make no money outside of poker, but plenty more than 4k a year after taxes that I can put in my roth IRA.

Should I be putting my taxed poker winnings in my IRA or not?

Re: Roth IRA questions..
 

Roth IRA is for earned income. I think poker is earned. Its not passive.

Re: Roth IRA questions..
 

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Roth IRA is for earned income. I think poker is earned. Its not passive.

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What income is allowed?

This amount is defined in section 219(f)(1) to include wages, commissions, professional fees, tips, and other amounts received for personal services, as well as taxable alimony and separate maintenance payments received under a decree of divorce or separate maintenance. Compensation also includes earned income as defined in section 401(c)(2), but does not include any amount received as a pension or annuity or as deferred compensation. In addition, under section 219(c), a married individual filing a joint return is permitted to make an IRA contribution by treating his or her spouse's higher compensation as his or her own, but only to the extent that the spouse's compensation is not being used for purposes of the spouse making a contribution to a Roth IRA or a deductible contribution to a traditional IRA.

In other words, gambling winnings unless you file as a professional gambler are not allowed to be used.

Don't forget the income limits:

$160,000 for married filing jointly or qualifying widow(er),

$10,000 for married filing separately and you lived with your spouse at any time during the year, or

$110,000 for single, head of household, or married filing separately and you did not live with your spouse at any time during the year.

Re: Roth IRA questions..
 

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So it looks like I have until tax day to contribute for 06, correct?

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Yes.

Re: Roth IRA questions..
 

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Is the deadline Dec 31 to put money in or do you get some time in 07 for the 06 contributions?

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You have until Tax Day of 2007 (Apr. 15th) to get your 2006 contribution maxed out. So you got time.

Re: Roth IRA questions..
 

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if you are around 20 and put $4K in every year for the next 4 years, and never touch it again, you should easily have $1M by your early sixties.

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Which will be about $250k in today's dollars (and not enough to retire).

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I think that sounds about right, after factoring in inflation. I was just responding to OP's specific question about how easy it is to get a million dollars. I never meant to imply that it is enough to retire on.