IRA Eligibility

[Randall]

As for compensation requirements for IRA contribution eligibility, is Box 1 or Box 3 the determining amount.  Just wondering regarding the s corp health insurance deduction.  If that drops Box 3 down to zero, would Box 1 amount still allow for an IRA contribution.

[jklcpa]

IRA contribution is calc'd using W-2 box 1 minus box 11. 

It sounds like your S corp W-2 has only the health insurance in box 1 and no actual wages were paid, and therefore boxes 3 and 5 are zero. Is that correct?

If that is the case, no SEHI would be allowed because the medicare wages from the S corp are -0-, but I do think that the IRA contribution would be deductible.

[Randall]

Thanks jklcpa.  Yes, that's the situation.  That's what I was reading too regarding the IRA contribution.  Thanks for the heads up on SEHI.  I was thinking of the IRA but there would be no SEHI deduction.