S**C
发帖数: 2964 | 1 Some unexpected income near the year-end pretty much eliminated, or at least
reduced, our permitted ROTH contribution for the year 2011. since we
already contributed to ROTH for the year 2011, we get a problem which need
to be corrected. It is certainly a good problem to have but a problem all
the same.
It appears to us the best practice is to recharacterize our excess 2011 ROTH
contribution to non-deductible IRA, am I right? In order to do that, each
of us need to open a new IRA account, transfers the excessive portion plus
earnings attributable to that portion to the new IRA account. If I make a
ROTH conversion on my non-deductible IRA later this year, it will counted as
year 2012 conversion, right?
Your comments are appreciated. | f*******n
发帖数: 12623 | 2 Yes, you are correct. I am not sure how exactly to do a recharacterization;
but your current IRA broker should be able to do it easily for you.
It will count as a year 2012 conversion, since it is year 2012 now. However,
(assuming you do not have other traditional IRAs) you will only be taxed on
the earnings in the IRA since it was opened (which should not be much); not
the principal, since it is non-deductible.
Another option is instead of recharacterizing, to simply take out the Roth
IRA entirely (which you are allowed to do; it will count as if you never
opened it) and open a traditional IRA now for year 2011, then do the
conversion immediately. This way (again assuming you do not have other
traditional IRAs) there is guaranteed to be no tax. Which option is better
depends on your situation. |
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