I opened a Roth IRA in 2024 and contributed $8,000. According to the Fidelity calculator, I was eligible to contribute to a Roth IRA based on our (married, filing jointly) MAGI for 2023.
I am doing our taxes in TurboTax, and apparently we made too much in 2024 for me to have contributed to a Roth IRA. TurboTax is telling me that I will incur a 6% penalty on the total amount now and each year going forward, unless I withdraw the excess contribution (which is the entire value I assume) or change the Roth IRA to a Traditional IRA.
As of December 31, 2024, the Roth IRA was worth $8,040. Now, however, the value has dropped to $7,572 due to market declines (no money was withdrawn).
Is converting the Roth to a Traditional IRA the best way to proceed here (as opposed to withdrawing the total at a loss)? Any advice would be greatly appreciated.
Thank you.
