> Hi all. If one contributes to one's ROTH to the max, early in the
> year,
> and then manages to earn more than expected, into or beyond the
> contribution phase-out range, is the solution to simply withdraw
> the contribution amount?
You can withdraw or transfer to non-deductable traditional IRA.
In both cases the earnings or losses are pro****tional the fraction
of the contribution at the time of the contribution and the IRA
trustee
figure this number out for you.
The traditional IRA will then have an after-tax component and a
possible
tax-deferred component. The first is called the basis and re****ted
to the IRS in form 8606 when it changes. You wont have to pay tax a
second time when funds are witdrawn in retirement on the basis part
of the IRA.
For the year 2010 the AGI limit is removed for Roth.
You can convert old amounts. Some poepel I know are stuffing
their traditional IRAs with after-tax contributions for 2010.
(This assumes the new President doesnt change this law.)
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