How to get "earned income" for Roth IRA

pr0crast · #1 02-23-2007, 02:30 AM

I have only ever had poker income and investment income. I have no "earned" income, and I'm beginning to get angry.

How can I create "earned" income without going out and getting some crappy min wage job? Is it feasible to do a fake "consulting" job for a friend, give them a check, then have them give me a check, and pay the taxes/social security etc on this "earned" money?

Any ideas?

BradleyT · #2 02-23-2007, 04:55 AM

Why isn't your poker income earned income?

ski · #3 02-23-2007, 07:05 AM

I'm filing as a poker pro for 2006, my accountant says that will give me earned income. If anyone can think of a better way I'd like to know.

ski · #4 02-23-2007, 07:14 AM

also if your going to commit tax fraud with a consulting job for god sakes pay ur friend in cash.

maxtower · #5 02-23-2007, 07:42 PM

I don't think the check thing will work that well because you'll end up paying the taxes twice.

You pay the taxes on the money that you give to your friend. Then you have to pay the taxes on it once he gives it back to you. So thats no good.

pr0crast · #6 02-24-2007, 03:40 PM

[ QUOTE ]
also if your going to commit tax fraud with a consulting job for god sakes pay ur friend in cash.

[/ QUOTE ]
WTF does the government care? I am as a result paying extra tax this year that I otherwise would not have (on the money I am being "paid"), and there's no way they can prove I didn't do a consulting job. How is it tax fraud if I'm overpaying in taxes?

curtains · #7 02-24-2007, 07:55 PM

The only real difference between investing yourself in index funds/bonds etc and a Roth IRA are the tax benefits correct? That and your money is less flexible in the IRA?

Statutory · #8 02-23-2007, 08:30 PM

[ QUOTE ]
I'm filing as a poker pro for 2006, my accountant says that will give me earned income. If anyone can think of a better way I'd like to know.

[/ QUOTE ]

So you are going to pay the 15% self employment tax?

Statutory · #9 02-23-2007, 08:31 PM

OP,

Im in the same situation. I don't see any easy way around it, and getting a job is a waste of time.

ski · #10 02-23-2007, 11:07 PM

[ QUOTE ]
[ QUOTE ]
I'm filing as a poker pro for 2006, my accountant says that will give me earned income. If anyone can think of a better way I'd like to know.

[/ QUOTE ]

So you are going to pay the 15% self employment tax?

[/ QUOTE ]

Its still worth it for my sweet Publication 54 ~$82K deduction.