BOBOT
Recycles dryer sheets
- Joined
- Aug 17, 2006
- Messages
- 478
So I recently made our annual Roth contributions for 2013. As in years past, I did so with belief that both DW and I could contribute based on her earned income (I'm ER'd 6 yrs now, with no EI). Also, did the max as in years past.
Problem: she's retiring at the end of next month, and her EI for TY2013 will be a lot less than our combined Roth contributions, and I believe the excess is penalized at 6%.
However, I find this in IRS Pub. 590:
For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. This treatment only applie?s if any earnings on the contributions are also withdrawn. The earnings are considered earned and received in the year the excess contribution was made.
So if we withdraw the excess now do we avoid the penalty?
Edit: DW is 56. Will the w'drawal of the excess from her Roth be regarded as a "qualified distribution"?
Problem: she's retiring at the end of next month, and her EI for TY2013 will be a lot less than our combined Roth contributions, and I believe the excess is penalized at 6%.
However, I find this in IRS Pub. 590:
For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. This treatment only applie?s if any earnings on the contributions are also withdrawn. The earnings are considered earned and received in the year the excess contribution was made.
So if we withdraw the excess now do we avoid the penalty?
Edit: DW is 56. Will the w'drawal of the excess from her Roth be regarded as a "qualified distribution"?
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