Excess Roth IRA Contribution
I made a $5,000 Roth IRA contribution for 2012 and then found out from my accountant that my income was too high to qualify for a Roth IRA. Should I recharacterize the contribution to a non-deductible IRA? Can I then convert that back to a Roth IRA?
Permalink Submitted by Alan - IRA critic on Sat, 2013-04-13 01:04
That is certainly a possibility, but all your non Roth IRA accounts will be used to determine how much of your conversion is taxable. If you have no other non Roth accounts on 12/31/2013, you conversion will be tax free except for any earnings that have been generated on your 5,000 contribution (either in the Roth or in the TIRA after recharacterization). If you recharacterize to a TIRA report your 2012 non deductible contribution on Form 8606.
Permalink Submitted by Patricia Varnum on Thu, 2013-04-18 15:29
I made a excess contribution to a 2012 Roth IRA for $19.00. Do I need to file an Amended 1040X for tax year 2012?
Permalink Submitted by Alan - IRA critic on Thu, 2013-04-18 20:38
I wouldn’t file a 1040X in this situation. You can request a corrective distribution to return the 19 plus applicable earnings. Your earnings on the 19 (probably less than a dollar or maybe 3 dollars at most) would be taxable in 2012, but would probably not change your tax liability.