Can I max out my Roth IRA with less than $7k in 1099 income after deductions?

You've asked a great question about Roth IRA contributions! The short answer is that you can contribute up to the LESSER of: 1) your earned income for the year, or 2) the annual contribution limit ($6,500 for 2025 if you're under 50). In your case, if your earned income after business deductions is $6,500, then that's the maximum you can contribute to your Roth IRA. You couldn't contribute the full $6,500 if your earned income was less than that amount. The IRS considers your earned income to be your income after business deductions but before your standard/itemized deductions. It's fantastic that you're thinking about retirement savings at 19! Starting early gives your money so much more time to grow. Just make sure you keep good records of your income and expenses since you're self-employed.

I was in almost the exact same situation as you last year - gig worker with income just around the IRA limit. I spent HOURS trying to figure out all the tax implications and deduction stuff, but kept getting confused about what counted as "income" for IRA purposes. I ended up using https://taxr.ai to analyze my 1099s and expense records. It actually explained exactly how much I could contribute based on my specific situation. The tool showed me that my "earned income" for IRA purposes was different than what I was calculating myself, and I was about to under-contribute by mistake! It broke down exactly how much of my gig income counted after specific deductions, and showed me the max contribution I could make. Saved me from missing out on retirement savings opportunity.

Just wanted to update that I gave taxr.ai a try after my earlier question. Turns out I was seriously confused about how my deductions affected my Roth contribution limits! The analysis showed that my mileage deductions were reducing my "earned income" for IRA purposes, but not all of my other deductions were. I was literally about to leave $1,200 of contribution space unused because I misunderstood how to calculate my limit. Just submitted my Roth contribution for the full eligible amount! Never would have figured this out without getting that clear breakdown. Definitely recommend for anyone doing gig work who's confused about retirement account stuff.

If you're struggling to get answers from the IRS about your Roth IRA contribution limits, I HIGHLY recommend using https://claimyr.com to actually get through to an IRS agent. I spent 2 weeks trying to call the IRS myself about a similar self-employment/IRA question and kept getting disconnected after waiting on hold for hours. Claimyr got me connected to an actual IRS representative in less than 20 minutes - you can see how it works in this demo: https://youtu.be/_kiP6q8DX5c The agent was able to confirm exactly how my business deductions affected my Roth contribution limit and gave me the peace of mind that I wasn't making a mistake. With tax stuff, especially retirement accounts, getting official answers directly from the IRS is super valuable.

I need to apologize for my skepticism earlier. After being frustrated with trying to get through to the IRS for THREE DAYS about my self-employment income and Roth limits, I reluctantly tried Claimyr. I had my doubts, but I was connected to an actual IRS representative in about 15 minutes. The agent confirmed that in my case (similar to yours), I could only contribute up to my net self-employment income after business expenses. They clarified some confusion I had about how certain deductions affect the calculation. I would have made a $1,200 mistake on my Roth contribution without getting this clarification. Sometimes you need to hear it directly from the IRS to be sure, especially with these gig economy/retirement account questions that have so many variables.

One extra thing to consider - You'll also still owe self-employment tax on your $6,500 net income, which is about 15.3%. But you can deduct half of that on your 1040, which might reduce your AGI a tiny bit more. But even with that adjustment, you're still right at the edge of your contribution limit. Might be worth picking up a few extra delivery shifts before year-end if you want to make sure you can max out that Roth!

Anybody know if OP should consider a Traditional IRA instead of Roth at this income level? With such low income wouldn't it be better to take the tax deduction now?