Last year My wife deposited the maximum amount into her IRA. She also has a 401K. I made a little too much last year for her to qualify for the IRA deduction (over $120, 000.00 income). I work on commission. My taxes aren't due until Oct 15. When she made those deposits she classified them as deductible. Also, she withdrew $1000.00 last year early on in the year. Can she use that $1000.00 against her non-deductable deposits? She is over 60
When last years deposits become non deductible as a result of the higher income, how does she reclassify them? Because when she pulls money out she will get a 1099 and we dont want that to be taxable. Also, we would like to move the non-deductible portion over to my personal IRA for 2021 (I dont have a 401K). Is there a form that needs to filed now? I hope there isn't a penalty
