Excess Roth contribution due to legal separation

Submitted by Jeff Beebe on Mon, 2024-03-04 23:00

A client who made $20,000 in 2023 contributed $1200 to her Roth ($100 / month). Her husband moved out in April 2023 and they became legally separated but not divorced in October 2023. It appears my client’s income limitation for Roth IRA contributions is $10,000, which she is above and now has excess Roth contributions.

Can those excess contributions be recharacterized to a Traditional IRA by the tax filing due date? Or does she need to withdraw the excess contributions?



Submitted by Alan - IRA critic on Tue, 2024-03-05 00:04

If legally separated and not remarried, she must file as single or HOH, not as MFS. As such, she does not have an excess contribution. The following is copied from the IRS website:
“If you’re legally separated or divorced at the end of the yearYou must file as single for that tax year unless you’re eligible to file as head of household or you remarry by the end of the year.”

Submitted by David Mertz on Tue, 2024-03-05 01:08

Having a separation agreement does not make one “legally separated” for the purpose of filing a tax return.  If your divorce has not yet been finalized, you are still legally married and must file MFJ, MFS or, if the requirements are met, HOH.  If you don’t meet the requirements for filing HOH and are not able to file jointly, you must file MFS.  Filing MFS means no Roth contribution is permitted if MAGI is $10,000 or more.

Add new comment

Log in or register to post comments