Roth Excess Contributions
My wife and I (both 60+) have contributed the max to our Roth IRAs through 2024. Realized that due to conversions in 2021 and 2022, we were over the income limit in those years and will likely be for TY 2023 and 2024. From reading this forum, I think I have a plan on what we need to do.
1. Remove our excess contributions ($7K each) from our respective Roth accounts for 2021 and 2022.
2. File a 2021 5329 for each of us and file with an amended 2021 1040
3. File a 2022 5329 for each us and file with an amended 2022 1040
4. File a 2023 5329 for each of us and file with our 2023 taxes this year
– We pay the 6% for years 2021-2023 and leave all earnings in the accounts.
5. We recharacterize the 2023 Roth contributions to TIRA when we file this year.
6. We recharacterize the 2024 Roth contributions to TIRA sometime before filing next year.
Am I close? Is there anything I am missing or should do instead?
Permalink Submitted by Alan - IRA critic on Tue, 2024-02-20 03:16
Conversions are not included in your MAGI for regular Roth IRA contribution purposes. See worksheet 2-1 in Pub 590 A. Are you still over the MAGI limit without including the conversions?
Permalink Submitted by Gary Saddler on Tue, 2024-02-20 12:05
That was a big miss on my part! Thanks for the direction! Deducting the conversions does put us under the max income for 2021/2022. We should be good for 2023/24 as well. Thanks again!