Advertisement
Roth IRAs

What Roth Owners Should Do if They Exceed the Income Limit

You can avoid the penalty if you have your IRA administrator move your 2014 Roth IRA contributions into a traditional IRA.

I contribute monthly to a Roth IRA. My wife and I just realized that our joint income will exceed the $191,000 limit for Roths this year. What should we do? --L.R., Simi Valley, Calif.

You can avoid the 6% penalty on the money you contributed if you take your 2014 contributions (and any earnings on them) out of the Roth before the tax-filing deadline on April 15, 2015 (or October 15, 2015, if you file an extension). The contributions you withdraw are tax-free, but you must include the earnings as income for 2014. You can also avoid the penalty and taxes if you have your IRA administrator move your 2014 Roth IRA contributions (plus all the earnings on that money) into a traditional IRA by October 15, 2015.

Advertisement

Most Popular

What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
Tax Changes and Key Amounts for the 2020 Tax Year
tax law

Tax Changes and Key Amounts for the 2020 Tax Year

Americans are facing a long list of tax changes for the 2020 tax year...and it's never too early to start thinking about next year's return.
June 22, 2020
10 Tax Breaks for the Middle Class
tax deductions

10 Tax Breaks for the Middle Class

Tax breaks aren't just for the rich. There are plenty of them that are only available to middle- and low-income Americans.
June 30, 2020

Recommended

Avoid Blindly Following Random Benchmarks on the Road to Retirement
retirement planning

Avoid Blindly Following Random Benchmarks on the Road to Retirement

Unless the benchmark is relevant to your personal plan, it could steer you into taking a wrong turn.
July 8, 2020
Where Should You Retire?
retirement planning

Where Should You Retire?

This week, our Your Money's Worth podcast host Ryan Ermey interviews co-host Sandy Block about her recent story about the best retirement destinations…
July 7, 2020
Find a Great Place to Retire
happy retirement

Find a Great Place to Retire

Our cities provide plenty of space to spread out without skimping on health care or other amenities.
July 2, 2020
Searching for the Perfect Place to Retire
Empty Nesters

Searching for the Perfect Place to Retire

We home in on two places with less traffic and lower costs. 
July 2, 2020