2023 Roth IRA Eligibility
Hello,
I have a client that is 71 in 2023and single and falls between the lower and upper MAGI and has contributed $7,000 as a current year contribution for 2023. They are asking me to confirm if they are eligible but I want to suggest that they speak to a tax advisor to confirm they are eligible, if they are not then I can help have the contributions removed as a return of excess.
What are your thoughts on this matter? Any help would be greatly appreciated. Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2023-07-24 20:58
How to they know exactly what their 2023 MAGI will be? Since the contribution has already been made, they should wait to see what the excess amount is, if any. They can then remove just the excess with adjustment for gain/loss, or recharacterize the excess as a TIRA contribution. Another option if there is a large gain on these contributions is to pay the excise tax on the excess, leave the gain in the Roth and then just remove the dollar amount of excess before year end. For next year though, they might wait to see what their MAGI is before contributing, so there is no excess to deal with.