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Another Roth income limit question
Posted on 3/27/19 at 12:27 pm
Posted on 3/27/19 at 12:27 pm
My wife and I income is below the cap for contributing to a Roth. When we add in the rental income we get from a property it gets a bit dicey. For purposes of a Roth is it the full rental price that gets charged to our income or the amount after after expenses. Or does rental income not count against the Roth at all?
I also don’t understand how I take money out of the Roth once it is in there and I do go over. Some of our income isn’t guaranteed so I don’t know if we will go over the income limits until November/December and I have already deposited the money and purchased the stock in January.
I also don’t understand how I take money out of the Roth once it is in there and I do go over. Some of our income isn’t guaranteed so I don’t know if we will go over the income limits until November/December and I have already deposited the money and purchased the stock in January.
2
Posted on 3/27/19 at 1:40 pm to Jp1LSU
quote:
When we add in the rental income we get from a property it gets a bit dicey. For purposes of a Roth is it the full rental price that gets charged to our income or the amount after after expenses. Or does rental income not count against the Roth at all?
Rental income is only taxed on the net profit, not your gross revenue. If you're still near the income limits, just do the backdoor to avoid any issue. It's not any more difficult, but you do need to deposit $6k at once.
Posted on 3/28/19 at 9:55 pm to Jp1LSU
In the future, wait until you prepare your tax return for the prior year. If your AGI on the return is below the Roth limit, you can make a contribution attributed to the prior year up until April 15.
For example, I recently did my 2018 taxes and had until April 15, 2019 to make a 2018 contribution.
For example, I recently did my 2018 taxes and had until April 15, 2019 to make a 2018 contribution.
Posted on 3/29/19 at 9:29 am to Twenty 49
I thought about that but I hate the idea of money not put to work for 12-15 months. I max out the first business day in January.
Anyone know what they do to you if you fund a Roth but stepped over the income line?
Anyone know what they do to you if you fund a Roth but stepped over the income line?
Posted on 3/29/19 at 9:44 am to Jp1LSU
quote:
Anyone know what they do to you if you fund a Roth but stepped over the income line?
Roth IRA Rules
Posted on 3/29/19 at 3:15 pm to Jp1LSU
quote:
I thought about that but I hate the idea of money not put to work for 12-15 months. I max out the first business day in January.
What's the issue? Do you have other T-IRAs? Back door the contribution and move on. I was nervous the first year, but it's simple and legal. Plenty of sites online to show you the steps.
Posted on 3/29/19 at 9:32 pm to Jp1LSU
quote:
Anyone know what they do to you if you fund a Roth but stepped over the income line?
It depends on how much over the line you are. If you’re over, but close, you’ll simply have to pull out a portion of your prior year’s contribution from your Roth. When your taxes are filed, you’ll know how much the withdrawal will have to be. We had to pull out $1,280 apiece out of wife and my Roths a few years ago. If you’re way over, all of it will come out.
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