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re: Filed 2022 Taxes and am over the ROTH Income Limit
Posted on 4/12/23 at 11:09 am to Drunken Crawfish
Posted on 4/12/23 at 11:09 am to Drunken Crawfish
Well, enjoy jail.
So you have an option.
1) Before April 15, pull out the contribution and associated earnings, and pay incone tax on the earnings (plus 10% penalty on the earnings if you are under 59.5)
2) Wait until after April 15th, and pull out only the contribution, but you can leave the earnings in. Instead, you pay a 6% penalty on the contribution you removed. But note, tha 6% penalty repeats each year. So, keep that in mind.
So you need to run the numbers both ways and see what works best for you.
For the first option, there is a forumla on this website that you use to determine the excess contribition earnings.
LINK
So you have an option.
1) Before April 15, pull out the contribution and associated earnings, and pay incone tax on the earnings (plus 10% penalty on the earnings if you are under 59.5)
2) Wait until after April 15th, and pull out only the contribution, but you can leave the earnings in. Instead, you pay a 6% penalty on the contribution you removed. But note, tha 6% penalty repeats each year. So, keep that in mind.
So you need to run the numbers both ways and see what works best for you.
For the first option, there is a forumla on this website that you use to determine the excess contribition earnings.
LINK
1
Posted on 4/12/23 at 12:31 pm to LSUFanHouston
The MAGI limit for married filing jointly (assuming you are married) is $218K, but you can still contribute a reduced amount if you are under $228K. It's a small cushion in case you underestimated your MAGI to start the tax year.
I'm getting very close to the limit so I started researching the new requirements this past year.
ETA - if you're close to the limit, one trick is to wait until early in the next tax year so that you can get better visibility to your actual MAGI, and then contribute at that point if you are able to. We just made our 2022 contributions last week.
I'm getting very close to the limit so I started researching the new requirements this past year.
ETA - if you're close to the limit, one trick is to wait until early in the next tax year so that you can get better visibility to your actual MAGI, and then contribute at that point if you are able to. We just made our 2022 contributions last week.
This post was edited on 4/12/23 at 12:34 pm
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