I funded my RothIRA all year, but I earned too much money

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pipstem
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I funded my RothIRA all year, but I earned too much money

Postby pipstem » Tue Mar 19, 2013 8:49 am

I'm in the middle of my taxes and just realized I earned 184,700, but the cutoff for contributing to a Roth is 180,000. Now I'm wondering what I should do to the contributions (mutual fund through Scottrade) that I made for this year? I shouldn't make as much next year, so I'll keep funding 2013.

Can I just have Scottrade transfer the 2012 Roth contribution into an IRA, or just cash out and pay the capital gains (if any)?

Bichon Frise
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Re: I funded my RothIRA all year, but I earned too much mone

Postby Bichon Frise » Tue Mar 19, 2013 9:45 am

you'll have to recharacterize it to a (I assume) non-deductible IRA. If you don't have any other IRA's, you can then do a back door roth. It happens all the time. Call Scottrade. This should have minimal to no impact on your tax liability.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

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Mario
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Re: I funded my RothIRA all year, but I earned too much mone

Postby Mario » Tue Mar 19, 2013 4:05 pm

Would adding to a normal IRA to drop your AGI help?
http://debtblag.com

Track my fiscal fitness with $0.5 million in debt: http://getrichslowly.org/forum/viewtopic.php?f=11&t=61052 Latest update: As of April 16, I've paid off $21,400 in credit card debt this year (after starting with $35k)

Bichon Frise
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Re: I funded my RothIRA all year, but I earned too much mone

Postby Bichon Frise » Tue Mar 19, 2013 6:07 pm

Mario wrote:Would adding to a normal IRA to drop your AGI help?


small chance that would work. The OP would have to be one of the very small minority who isn't covered by a plan at work.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

pipstem
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Joined: Tue Mar 19, 2013 8:44 am
Contact:

Re: I funded my RothIRA all year, but I earned too much mone

Postby pipstem » Tue Mar 19, 2013 6:24 pm

Bichon Frise wrote:
Mario wrote:Would adding to a normal IRA to drop your AGI help?


small chance that would work. The OP would have to be one of the very small minority who isn't covered by a plan at work.


I just joined a small family business that doesn't offer a 401k. What would happen if I just sold this years contributions? But then again, I've already been mailed my contribution notice from Scottrade. Is that in concrete as far as the IRS knows. Taxes are fun.

Bichon Frise
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Joined: Fri May 04, 2012 2:23 pm
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Re: I funded my RothIRA all year, but I earned too much mone

Postby Bichon Frise » Tue Mar 19, 2013 7:34 pm

pipstem wrote:
Bichon Frise wrote:
Mario wrote:Would adding to a normal IRA to drop your AGI help?


small chance that would work. The OP would have to be one of the very small minority who isn't covered by a plan at work.


I just joined a small family business that doesn't offer a 401k. What would happen if I just sold this years contributions? But then again, I've already been mailed my contribution notice from Scottrade. Is that in concrete as far as the IRS knows. Taxes are fun.


were you eligible at anytime in 2012 for an employee sponsored plan?

You need to recharacterize. don't sell. Nothing is concrete as far as the IRS is concerned. if you file for an extension, you have until 10/15 to recharacterize.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

Mario
Posts: 95
Joined: Fri Jan 18, 2013 7:21 am
Location: New York
Contact:

Re: I funded my RothIRA all year, but I earned too much mone

Postby Mario » Wed Apr 03, 2013 2:06 pm

Earning too much money is a problem I look forward to having someday :)
http://debtblag.com

Track my fiscal fitness with $0.5 million in debt: http://getrichslowly.org/forum/viewtopic.php?f=11&t=61052 Latest update: As of April 16, I've paid off $21,400 in credit card debt this year (after starting with $35k)


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