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Posted by joeNOSPAM@bea.com on May 3, 2008, 7:01 am
Hi all. If one contributes to one's ROTH to the max, early in the
year,
and then manages to earn more than expected, into or beyond the
contribution phase-out range, is the solution to simply withdraw
the contribution amount? What if the contribution was invested, and
gained before being liquidated and withdrawn? Does one withdraw
the gain as well and declare it as short-term gain?
thanks,
Joe
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Posted by rick++ on May 4, 2008, 5:16 pm
> Hi all. If one contributes to one's ROTH to the max, early in the
> year,
> and then manages to earn more than expected, into or beyond the
> contribution phase-out range, is the solution to simply withdraw
> the contribution amount?
You can withdraw or transfer to non-deductable traditional IRA.
In both cases the earnings or losses are proportional the fraction
of the contribution at the time of the contribution and the IRA
trustee
figure this number out for you.
The traditional IRA will then have an after-tax component and a
possible
tax-deferred component. The first is called the basis and reported
to the IRS in form 8606 when it changes. You wont have to pay tax a
second time when funds are witdrawn in retirement on the basis part
of the IRA.
For the year 2010 the AGI limit is removed for Roth.
You can convert old amounts. Some poepel I know are stuffing
their traditional IRAs with after-tax contributions for 2010.
(This assumes the new President doesnt change this law.)
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
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Posted by Augustine on May 5, 2008, 12:11 pm
I came across this issue one year when I sold some stock options. I
found out that the contribution had been excessive and then I had to
withdraw the balance. The brokerage firm, TDA, charged a "hefty" fee
of $25 for this withdrawal.
Was my decision then of only contributing to an IRA after I've done
the taxes, but before April 15 of the next year, right?
TIA
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
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Posted by Ron Peterson on May 6, 2008, 5:21 am
> Was my decision then of only contributing to an IRA after I've done
> the taxes, but before April 15 of the next year, right?
If you get good returns on your investments, it would be best to
contribute early.
--
Ron
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
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