Roth IRA Contribution to 401K

Forum|Forum|7 years ago
June 16, 2019
3 replies
35 views

It might be exceptionally helpful to tell the IRS that. They sent a letter to my wife telling her to ante up 1029.44 in tax and penalties. Thus to them it is a Roth IRA. In addition, the Thrift Savings Plan also claims it is Roth IRA. It is the L 2020 Fund found in the L Fund of the Thrift Savings Plan and they are taxing her.....

Why and how do we circumvent the issue.???

Thanks

dmertz

Level 15

No, the TSP does not claim that its designated Roth account is a Roth IRA. Since it is not a Roth IRA, the TSP does not issue to your wife and to the IRS any Form 5498 indicating any contribution to a Roth IRA, so the only way that the IRS would think that there was an excess contribution to a Roth IRA is if you caused your tax return to include Form 5329 Part IV by mistakenly entering a Roth IRA contribution into TurboTax. (This could also result if in a prior year you mistakenly reported a Roth contribution to the TSP as a Roth IRA contribution and the IRS believes that this supposed Roth IRA contribution remained unresolved for the subsequent year).

Payat0655Author

Level 2

I could really use some guidance. 1. My wife, who is a little worried about being poor in retirement, has an ROTH IRA which she is maxing out to the specific 19000 as prescribed by the IRS. Can she have more than on ROTH IRA Account with different institutions, do they all combine to one maximum amount in other words if she has two ROTH IRAs and she contributed to both would they consider each one separate or combine the total contributions. 2. How many IRAs Regular can she have and how are the total contributions figured in.

Thanks.

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dmertz

Level 15

This is a public forum. To avoid becoming the victim of scammers you should remove your address from your post.

You are confusing IRAs with employer-provided qualified retirement plans, two different types of retirement accounts. If your wife is contributing $19,000, it's not to a Roth IRA, it's to a qualified retirement plan, apparently to a designated Roth account in that plan. If she is eligible to take distributions from the account in the employer plan she can move it to a Roth IRA, but it's not presently in a Roth IRA. The limit for contributing to a Roth IRA for a particular year is independent of the limit for contributing to an employer-provided plan.

Each employer provided qualified retirement plan is tracked independent of any others. On the other hand, her traditional IRAs, if she has any, are all treated as if they are a single traditional IRA and her Roth IRAs, if she has any, are treated as a single Roth IRA. There is no limit to the number of separate IRA accounts an individual can have and the number of qualified retirement plan accounts an individual might have would only be limited by the number of employers the individual has had. The combined contributions to a Roth IRAs for a particular year are not permitted to exceed the contribution limit for the year.