Vanguard Frustrations!

[HGTVFanatic]

What is happening at Vanguard?? I cannot get through to a human! I talked to someone in Sales around noon who said I had to be transferred to another department. Was on hold for about 40 minutes and gave up. I tried again around 5:00 PM and still on hold over an hour and a half later.

I have a pressing issue. I gave my adult daughter some money to put in her Roth. She did it. Then it occurred to the both of us that that was the wrong thing to do because she hasn't had any earned income for a year and is unmarried.
She has no brokerage account; only a Roth and a traditional IRA.

This mess has to be unwound but not sure how to do it without some advice.

If any gurus here have any ideas, please advise me. No good deed goes unpunished.

 

[Surewhitey]

https://finance.zacks.com/can-cancel-roth-ira-contribution-year-3094.html

 

[MRG]

^^^^^
The better you can explain what you want to do the better. You want to increase the odds of the rep you get being able to help you and not bailing on your request because they don't know understand exactly what you want. Can you do this on their site? Open a brokerage and move the money.

There's no worse day to call any provider as tomorrow so call as soon as the phones open.

 

[ocean view]

I read in the news that the Vanguard website was down for an extended period of time yesterday. All those folks trying to take RMDs and other year-end transactions are now scrambling to do them today. I’m sure phone traffic is normally heavy in the final days of the year, but the website crash just made it worse.

 

[HGTVFanatic]

https://finance.zacks.com/can-cancel-roth-ira-contribution-year-3094.html

Thank you for this. Very helpful. I am now panicking less because it appears there's still time (tax deadline) to unwind this without too much of a hit. However, she can't "recharacterize" to her traditional IRA because again -- no earned income. I appreciate the article very much!

 

[SecondCor521]

^^^^^
The better you can explain what you want to do the better. You want to increase the odds of the rep you get being able to help you and not bailing on your request because they don't know understand exactly what you want. Can you do this on their site? Open a brokerage and move the money.

There's no worse day to call any provider as tomorrow so call as soon as the phones open.

You cannot remove an excess contribution from a Roth IRA on Vanguard's website AFAIK.

OP, your daughter is probably best served by removing the excess contribution to her Roth IRA (which is the entire contribution, of course) plus attributable earnings. She has until the tax filing deadline to do so, which means she has until April 18, 2022 to take care of this.

Vanguard will remove the excess contributions plus any attributable earnings and refund this money back to her. They will also issue her a 1099-R next year (in January 2023, so about 13 months from now), and she will, I believe, owe ordinary income taxes plus a 10% penalty on the earnings (if any) if she is under 59.5, which she almost certainly is.