Hi there,
- I contributed the following to Roth IRA so far:
- 5500 (2018) + 6000 (2022)+ 6500 (2023) + 7000 (Jan 2024) + 7000 (Jan 2025)
- Line 11 of my 2023 Tax return shows $81,068 which I understand is the Modified Adjusted Gross Income.
- My base salary for 2024 was > $161k, so Modified Adjusted Gross Income in line 4 shows ~$203k.
- For the Question "Tell us the value of your Roth IRA", I entered the Ending Account value (~$30k) as of Dec 31st, 2024 from Fidelity 2024 Year End Report (Jan 1, 2024 - Dec 31, 2024). Please confirm if that's what is expected.
- Now, the next screen says "Your Income is Too High to contribute" and "Your modified adjusted gross income is ~203k which puts you over the current Roth limit of $162k. That means the $7000 you put in Roth is considered an excess contribution."
I would appreciate your advice on the best way to fix this issue as I did not realize earlier that I can only contribute to Roth IRA if my income is less than $161K ( or $150k for full) . Examples I can think of below:
- Should I fill any forms requesting Fidelity to withdraw $7k+it's gains that I contributed in Jan 2024 for 2024 and also the $7k+it's gains in Jan 2025 for 2025? Will I have to pay any penalties for that? Will that be sufficient to take care of this issue or should I do anything else?
- Should I try recharacterization from Roth IRA to Rollover IRA? (I only rolled the 401k of my previous employer to Rollover IRA IRA and had not contributed any else to Traditional IRA in 2024 nor 2025)
- Appreciate any other recommendations on options and how to go about.
Thank you so much in advance!
