IRA contributions, earned income


Q. You say neither a first-of-year, lump-sum leave payment nor a first-of-year, last paycheck qualifies as earned income for IRA purposes that same year. Considering IRA contributions are based on W2 wages, why wouldn’t the Internal Revenue Service accept these as earned income, since they are reported on that year’s W2 form, and taxed in the same year as the proposed IRA contribution?

A. I suggest that you review IRS Publication 590 for guidance on this issue.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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