Roth IRA question

[TeenInvestor2688]

is the $4000 that you have to make before or after taxes are taken out? I am working a summer job before I start college and it will be pretty close. I have $4k to invest in the Roth but I dont know if I can use it all based on if the money I make this summer counts as before or after tax money. I hope this is clear enough. Thanks

[WellManicuredMan]

Originally Posted by TeenInvestor2688

is the $4000 that you have to make before or after taxes are taken out? I am working a summer job before I start college and it will be pretty close. I have $4k to invest in the Roth but I dont know if I can use it all based on if the money I make this summer counts as before or after tax money. I hope this is clear enough. Thanks

Money put into a Roth IRA has already been taxed. But it sounds like you may not have to pay any taxes on your income this year because it is so low. The standard deduction should make your taxes $0, which makes the Roth IRA an excellent choice if you don't need the money for anything.

[autoxer]

For 2006, If your gross income (before it is taxed) is at least $4000, then you can contribute the full $4000.

IRS p590 says your contribution limit is the lesser of:

• $4000, or
• Your taxable compensation for the year.