I know there's some financial peeps on here so I'm giving this a try...

 

I'm over my Roth contribution limit for the year by $1k. If I understand it, I can withdraw that $1k, plus the earnings on the WHOLE IRA since the $1k was deposited (May) and I'd be GTG, right? No harm no foul? No special paperwork?

If I recall correctly, the "earnings" are what can't be touched. With a Roth, I believe you can take the contributions without penalty because they're not pre-taxed, but you can't take the earnings without penalty.

That was my understanding too, I just thought they didn't let you "benefit" from the excess contributions, I.e the interest. So that interest would be covered by withdrawing additional contributions in kind.

 

Blah. Maybe I'll have to spring for a pro this year.

 

 

 

Get a pro, it doesn't really cost that much.

I know there's some financial peeps on here so I'm giving this a try...

 

I'm over my Roth contribution limit for the year by $1k. If I understand it, I can withdraw that $1k, plus the earnings on the WHOLE IRA since the $1k was deposited (May) and I'd be GTG, right? No harm no foul? No special paperwork?

You are correct, you need to do this by your filing deadline (April 15) or any extensions.

 

From IRS.gov:

 

"Withdrawal of excess contributions. For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. This treatment only applies if any earnings on the contributions are also withdrawn. The earnings are considered earned and received in the year the excess contribution was made.

If you timely filed your 2013 tax return without withdrawing a contribution that you made in 2013, you can still have the contribution returned to you within 6 months of the due date of your 2013 tax return, excluding extensions. If you do, file an amended return with “Filed pursuant to section 301.9100-2” written at the top. Report any related earnings on the amended return and include an explanation of the withdrawal. Make any other necessary changes on the amended return.

Applying excess contributions. If contributions to your Roth IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year."

 

Hope this helps.

 

 

Ed

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