Is this example how you would handle MAGI decreasing allowable contribution to Roth IRA?
Round One Example:
- Contributed: $7,000
- Maximum allowed: $5,200 (due to MAGI)
- Excess contribution: $1,800
- Earnings on the excess contribution: $200
Round Two Example:
- New income reported on 1099-R: $200
- New max allowed: $5,000 (due to new MAGI)
- New excess contribution: $200
- New earnings on the excess contribution: $10
Round Three Example:
- New total income reported on 1099-R: $210
- New max allowed: $5,000 (unchanged, so the loop stops)
