Comments on: Traditional and Roth IRA Contribution Limits

By: JZ

JZ — Thu, 05 Nov 2009 21:39:53 +0000

Under this setup, why would any married double-income couple want to file jointly?

By: Britt (Your Roth IRA)

Britt (Your Roth IRA) — Mon, 20 Jul 2009 19:42:36 +0000

@Anonymous – In regard to an excess Roth IRA contribution (your income rose above the threshold after you contributed), you need to get a “Distribution Request Form” from the IRA custodian (broker) who hosts your account. Fill out the form and return it to your broker. They should refund you the full amount of your original contribution. Save a copy of the form for your tax records.

Excess Roth IRA contributions incur a 6% annual penalty until the excess contribution is removed. However, the IRS does give you a decent time window in which to rectify the situation. As long as you fix things in a timely manner, you should be fine. Just make sure you document your excess contribution withdrawal.

By: Joe

Joe — Tue, 26 May 2009 10:33:53 +0000

For those asking, your total contribution to ALL IRA accounts cannot exceed the limits imposed by the IRS. If your limit is $5000, you can split it among your IRA accounts, but you can’t exceed $5000 total even if you have several accounts. There are penalties for contributing too much to your IRA accounts, so it’s not advisable unless you think your contributions can outperform the amount of penalty you’ll pay.

By: Anonymous

Anonymous — Thu, 16 Apr 2009 01:16:57 +0000

we had no earned income in 2008, and are converting $100k of traditional IRAs to Roth IRAs. we originally thought that the entiure $100k would be claimed as taxable income.

but some of the original IRA contributions were not deductible (they were post-tax)- can you point me to a table of maximum contributions that goes back to the beginning of IRAs? if we can separate the nature of the contributions then we should only have to claim income of the pretax contributions and 100% of the gains – correct?

I can only find maximum contributions back to 2002, but need many earlier years.

hope you can help.

By: sammamish

sammamish — Wed, 15 Apr 2009 22:25:45 +0000

By 2010

By: Jim

Jim — Thu, 09 Apr 2009 18:13:07 +0000

You can withdraw it but you may pay a penalty, call your broker to find out how to remedy this.

By: Anonymous

Anonymous — Thu, 09 Apr 2009 15:50:16 +0000

I made a Roth IRA contribution and now I find out I’m above the AGI limit to contribute. Can I withdraw the contribution as if it never happened and put the money somewhere else?

By: JJ

JJ — Tue, 17 Mar 2009 19:17:00 +0000

Which the IRA(Roth or Traditional) that I should fund first if married filed jointly with AGI around $159,000 in 2008? I guess Roth. Am I right? What if I can contribute $4000 to Roth IRA after taking phase out into consideration, can I contribute the remaining $1000 to a traditional IRA for 2008 so that my total IRA contribution for 2008 is below the $5000 limit?

By: Michael

Michael — Sat, 17 Jan 2009 08:22:19 +0000

I usually try to fund my Roth IRA at the beginning of each year based on the latest tax return filed. My income tax return had me below the phase-out limit in 2006, but near the end of 2007 I had a promotion and increase. As it was the end of 2007, not much change to 2007 AGI, but 2008 reflects the entire year’s income change and puts me over the phase-out limit.

Because I fund the IRA in January, the previous year’s tax return is not yet filed so I use the year’s before to check the income (with assumed increases) against phase-out limits.

If I did contribute to 2008 in January, based on 2006 Tax Return + assumed increase, and I am over the limit for 2008, what do I need to do?

By: jim

jim — Sat, 20 Dec 2008 11:09:31 +0000

They do not share the same contribution limits. They do affect one another in that when you contribute to a retirement account, your gross income is lowered and you could potentially contribute more to a Roth IRA if you’re in the income phase out region.

By: Michael Fischer

Michael Fischer — Sat, 20 Dec 2008 05:23:06 +0000

Does a 403B contribution, or 401K contribution in 2008 have any effect on what I can contribute to a Roth IRA ?

By: Lorenzo

Lorenzo — Sun, 23 Nov 2008 06:25:25 +0000

If you fund a simple IRA at $5000 and later in the year realize you can now fund it at $6000 because you turned 50 that year, can you put an additional $1000 in at ANOTHER institution (i.e, JP Morgan Chase IRA for the $5000 and Citibank IRA for the $1000 catch up). OR do you have to put the additional $1000 at the same institution (JP Morgan Chase in this example).

By: jim

jim — Thu, 28 Aug 2008 03:14:54 +0000

Cathie – According to the law as it exists today, that is correct to the best of my knowledge.

By: Cathie

Cathie — Thu, 28 Aug 2008 01:45:42 +0000

Just to verify what I am reading. Regardless of how much income we make in 2008 (lets exaggerate and say $300,000 MAGI) both my husband and I (both 50 years old in 2008) can make a $6,000 non-deductible contribution each to our traditional IRAs for 2008. Then in 2010 we can convert the momey to a Roth?

By: Ron

Ron — Tue, 18 Mar 2008 17:04:46 +0000

I understand that if I now put in the full amount (non-deductable) in a 2008 Roth IRA ($6000 as am over 50), but it turns out by the end of the year I have earned within the phase-out band or over the maximum ceiling for investing in a Roth IRA, I will need to recharacterize. What is the downside for gambling I will be able to make the Roth IRA investment as opposed to a Traditional IRA; that is, what is the penalty – lost income, interest, penalty, etc. – of needing to recharacterize?