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Funding a Roth with IRA withdrawals

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in Small Business Tax

Q. I am over 70 1/2, and I’m taking mandatory IRA distributions. Can I use those dollars to fund a Roth IRA? N.S., Atlanta

A. That depends. You can contribute to a Roth IRA only to the extent you have “earned income” during the year. So, you must have received wages, self-employment income or alimony. There’s no requirement to use the actual dollars generated from earned income to fund the Roth IRA, so you can use a mandatory IRA distribution for this purpose.

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