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Roth IRA When Switching to Married Filing Separately

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  • GasFIRE
    replied
    You recharacterize your contribution amount, $6K. Custodian will will figure out how much profit or loss is attributable to the $6K. No penalty, just tax on any earnings.

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  • bullsdoc
    replied
    Thanks so much for the thoughts. If invested in VTSAX or a different mutual fund, for example, how would this work? Do you generally guess an amount larger than 6k (6k plus whatever earnings) and just pay the penalty on the amount that is over? Thanks for your time

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  • GasFIRE
    replied
    If you’re MFS then yes you’ll need to do the BDR since the income limit is $10K. If you’ve already made a direct Roth IRA contribution you’ll need to recharacterize it back to traditional and then convert to Roth i.e. the BDR. You’ll owe income tax on any gains but there is no penalty. I’m assuming this is for 2021 or 2022.

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  • Roth IRA When Switching to Married Filing Separately

    Hey all,

    Hoping for some guidance here on contributing to Roth IRA after getting married and switching to married filing single for student loan purposes. Does this now mean need to back door Roth IRA?

    And what to do about contributions if any already made? Is there a way to withdraw them and pay the penalty on earnings from those contributions made just from the year where the filing switched? Thank you for your thoughts!
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