Permalink Submitted by Alan Spross on Mon, 2011-08-08 16:51
A return of a specific contribution for the prior year could be requested along with the adjustment for earnings. That year’s contribution then be made up until the due date for the tax return for the year of contribution (eg. 2011 contribution returned and then re contributed up to 4/15/2012 or 2010 contribution would have had to be re contributed by 4/18/2011). The specific year’s contribution must be requested when doing this and any earnings would also be distributed The earnings would be taxable and subject to penalty).
Also, an early distribution can be taken from the Roth and rolled back tax free within 60 days. One such rollover is allowed per IRA account per 12 month period.
Permalink Submitted by Alan Spross on Mon, 2011-08-08 16:51
A return of a specific contribution for the prior year could be requested along with the adjustment for earnings. That year’s contribution then be made up until the due date for the tax return for the year of contribution (eg. 2011 contribution returned and then re contributed up to 4/15/2012 or 2010 contribution would have had to be re contributed by 4/18/2011). The specific year’s contribution must be requested when doing this and any earnings would also be distributed The earnings would be taxable and subject to penalty).
Also, an early distribution can be taken from the Roth and rolled back tax free within 60 days. One such rollover is allowed per IRA account per 12 month period.
Permalink Submitted by Dave Haynie on Wed, 2011-08-24 17:41
Thanks Alan.
The situation I was thinking of is say you have a ROTH of $7k value in 2011, $5k contribution and $2k earnings and the contribution was made in 2007.
I believe your answer is you can remove the $5k without tax/penalty, but you can’t return it under any circumstances since it’s past Oct 15, 2008.
Thanks again.
Dave
Permalink Submitted by Alan Spross on Wed, 2011-08-24 19:32
That is basically correct. For replacing a 2007 withdrawn contribution the deadline would have been 4/15/2008.
A 60 day rollover can still be done for any amount as long as the withdrawal is returned to the Roth within 60 days.
Qualified reservist repayments provide an exception to the contribution limit date.