topic garbled answer revised to make sense. in Retirement tax questions

ARE CONTRIBUTIONS TO AN EXISTING ROTH IRA "TAXABLE"? (AND I DON'T MEAN "TAX DEDUCTABLE")

tdill — Sat, 01 Jun 2019 20:52:40 GMT

when I netered my 2018 roth ira "contribution" of $6500 my taxes due increased. Why? I thought taxes are only taken out at withdrawal.

try the backdoor Roth. But if you have traditional IRAs a...

fanfare — Sat, 01 Jun 2019 20:52:41 GMT

try the backdoor Roth.

But if you have traditional IRAs already you can't use that trick unless you are willing and able to convert it all.

garbled answer revised to make sense.

fanfare — Sat, 01 Jun 2019 20:52:43 GMT

garbled answer revised to make sense.

I made the same mistake. Contributions to Roth IRAs are...

netskip — Sat, 01 Jun 2019 20:52:44 GMT

I made the same mistake.

Contributions to Roth IRAs are only allowed if your income is below a certain threshold. I think that threshold is $130k. If I recall correctly, $390 has to be paid in tax every year that you haven't corrected the excess contribution. Let me repeat that: Not only do you owe more tax this year, you will owe more tax next year and the year after that because of the one contribution for 2018, unless / until you withdraw the $6500 and all the earnings on that excess contribution.

You can still correct the problem by reversing the contribution and earnings before the tax filing deadline. You'll need to send a request to your broker.

If you are single, you must have a modified adjusted gros...

SweetieJean — Sat, 01 Jun 2019 20:52:45 GMT

If you are single, you must have a modified adjusted gross income under $135,000 to contribute to a Roth IRA for the 2018 tax year, but contributions are reduced starting at $120,000. If you are married filing jointly, your MAGI must be less than $199,000, with reductions beginning at $189,000.