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Contributing to a Roth if I Make >196K

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  • DMFA
    replied
    Did you actually do the 2017 Roth contribution already, or is this a hypothetical?

    If you haven't yet, and you don't have pretax IRAs, then I'd just do backdoor in the first place (traditional contribution, not deducted, and converted to Roth ASAP). That'll save you the trouble just in case you go over the limit.

    Otherwise, you can simply recharacterize the contribution as Johanna outlined above.

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  • jfoxcpacfp
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    I am taking a new job at the end of the year which might put my income above the 186-196K income limit to be eligible to contribute to my Roth IRA. What happens if I have already paid into my Roth and then end up making, say, 200K? Do I have to withdraw with a penalty? Do I just convert it to a traditional IRA and pay taxes on the interest I made during the year (assuming I don’t lose money on my investments)? If I am forced to convert to traditional IRA can I then turn it back to a Roth with the “backdoor option.?” Appreciate any help. Thank you.
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    You can either empty the account by 4/15/18, pay taxes on any income, and contribute to a nondeductible TIRA or recharacterize to a TIRA. Obviously, the 2nd way would be the easiest.

    If you don't have any pre-tax IRAs in your name, you can then convert your n.d. TIRA to a Roth. If you do have pre-tax IRAs in your name, you'll need to move them to a qualified account before 12/31 to avoid paying pro-rata taxes on your conversion. Qualified accounts include 401ks, 403bs, and Roth IRAs.

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  • orion777
    started a topic Contributing to a Roth if I Make >196K

    Contributing to a Roth if I Make >196K

    I am taking a new job at the end of the year which might put my income above the 186-196K income limit to be eligible to contribute to my Roth IRA. What happens if I have already paid into my Roth and then end up making, say, 200K? Do I have to withdraw with a penalty? Do I just convert it to a traditional IRA and pay taxes on the interest I made during the year (assuming I don't lose money on my investments)? If I am forced to convert to traditional IRA can I then turn it back to a Roth with the "backdoor option.?" Appreciate any help. Thank you.

     
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