Over the limit for Roth IRA

[Anonymous]

I contributed to my Roth in 2018. After doing my taxes I realized I was over the income limit to be able to contribute to a Roth. How do I get the money out and transferred to a Traditional IRA?

[Anonymous]

You want to ask your IRA custodian (Fidelity, Schwab, Vanguard etc) to “recharacterize” the contribution to a traditional IRA.

https://www.irs.gov/retirement-plans/ira-faqs-recharacterization-of-ira-contributions

[Anonymous]

Helpful. Thanks

[Anonymous]

There's a form to reclassify it as a traditional IRA. Call the bank where the account is and they can walk you through it. I had to do this a couple years in a row (when my income was a little variable based on bonus) before I realized I was going to be consistently over the limit and just stopped contributing to the Roth.

[Anonymous]

The removal of SALT did this to me too. Had to reverse the contribution through my brokerage. Better get it done today though (or file an extension).

[Anonymous]

Move to traditional IRA and then concert to a Roth (look up backside Roth).

[Anonymous]

I have Vanguard. I had to snail mail them a form telling them to refund the overage plus the appropriate earnings (which they calculated). They then sent me a check. I had that all done before the tax deadline so I could file normally.

For 2019, I'm going to do a backdoor conversion to my Roth rather than start funding a traditional IRA.

[Anonymous]

Anonymous wrote:I have Vanguard. I had to snail mail them a form telling them to refund the overage plus the appropriate earnings (which they calculated). They then sent me a check. I had that all done before the tax deadline so I could file normally.

For 2019, I'm going to do a backdoor conversion to my Roth rather than start funding a traditional IRA.

I have Vanguard and was able to do it over the phone. If your bank acct is already connected they do EFT.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have Vanguard. I had to snail mail them a form telling them to refund the overage plus the appropriate earnings (which they calculated). They then sent me a check. I had that all done before the tax deadline so I could file normally.

For 2019, I'm going to do a backdoor conversion to my Roth rather than start funding a traditional IRA.

I have Vanguard and was able to do it over the phone. If your bank acct is already connected they do EFT.

Agree, I just did this over the phone with Vanguard earlier this week. It's all done online, they will walk you through it over the phone. They use the Verisign digital document and signature system.

The excess amount was put in my regular Vanguard IRA. I converted it today to backdoor Roth IRA. All of this is post-tax money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have Vanguard. I had to snail mail them a form telling them to refund the overage plus the appropriate earnings (which they calculated). They then sent me a check. I had that all done before the tax deadline so I could file normally.

For 2019, I'm going to do a backdoor conversion to my Roth rather than start funding a traditional IRA.

I have Vanguard and was able to do it over the phone. If your bank acct is already connected they do EFT.

Agree, I just did this over the phone with Vanguard earlier this week. It's all done online, they will walk you through it over the phone. They use the Verisign digital document and signature system.

The excess amount was put in my regular Vanguard IRA. I converted it today to backdoor Roth IRA. All of this is post-tax money.

Well shoot, I should have called first. The website says "You can't withdraw an excess contribution online. You must mail your completed form to Vanguard in order to start the excess contribution removal process." I guess I took that too literally.

I'll call when it's time to do the backdoor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have Vanguard. I had to snail mail them a form telling them to refund the overage plus the appropriate earnings (which they calculated). They then sent me a check. I had that all done before the tax deadline so I could file normally.

For 2019, I'm going to do a backdoor conversion to my Roth rather than start funding a traditional IRA.

I have Vanguard and was able to do it over the phone. If your bank acct is already connected they do EFT.

Agree, I just did this over the phone with Vanguard earlier this week. It's all done online, they will walk you through it over the phone. They use the Verisign digital document and signature system.

The excess amount was put in my regular Vanguard IRA. I converted it today to backdoor Roth IRA. All of this is post-tax money.

Well shoot, I should have called first. The website says "You can't withdraw an excess contribution online. You must mail your completed form to Vanguard in order to start the excess contribution removal process." I guess I took that too literally.

I'll call when it's time to do the backdoor.

One of their retirement specialists will initiate the re-characterization, you'll get a link in your Vanguard message inbox. She then walked me through the form as I filled it out. It takes a couple days to process and for the money to show up in your normal IRA. And then it takes a few more days for the IRA money to be able to be converted.

The backdoor Roth conversion is very easy. There's a link directly in your IRA account page to start the process. You'll end up owing tax if you're doing the conversion with pre-tax money, however.