Hello,
I hope I am not repeating a similar topic as I am confused reading all similar situations and doing my taxes at this time,
My situation is as follows:
- contributed to TIRA in early 2014 for the same tax year, amount $6,500 over age 50
- Due to change in my employment I am no longer eligible for deductible TIRA, and decided to transfer to Roth instead as it fits my current situation
- At end of January 2015, I have withdrawn my 2014 Contribution and earnings from my deductible TIRA, $6988, I have it in my bank account.
- I want to transfer the contribution to another financial institution that holds my Roth account,
Currently I am doing my taxes using Turbotax and I am confused on how to handle this situations,
I appreciate any help or advise in this regards,
Thanks in advance
I need help with my IRA's Contribution
Re: I need help with my IRA's Contribution
Perhaps it might have been better to have rechararacterized your TIRA contribution to a Roth one. http://fairmark.com/retirement/roth-acc ... ion-rules/
Then it would have been has if you had never made the TIRA contribution at all, just the Roth one. Your
earnings would be in the Roth account so you would not lose them from the tax favored account or have to
pay taxes on them.
Since you only removed them in January you may be able to accomplish much the same thing by doing an
indirect rollover to TIRA which you must complete with 60 days of the distribution and then a recharacterization
to a Roth but you should complete the whole process before April 15 and possibly might want to delay your tax filing
a bit. Also you should not have done a similar rollover from this account (or perhaps any account?) within the last 12 months.
You can move the whole 6988 but might want to talk to the receiving institution about your plans to make sure they are
agreeable to doing this.
You will want to file a narrative w/ your tax return describing the recharacterization. see p.3 here
http://www.irs.gov/pub/irs-pdf/i8606.pdf
Then it would have been has if you had never made the TIRA contribution at all, just the Roth one. Your
earnings would be in the Roth account so you would not lose them from the tax favored account or have to
pay taxes on them.
Since you only removed them in January you may be able to accomplish much the same thing by doing an
indirect rollover to TIRA which you must complete with 60 days of the distribution and then a recharacterization
to a Roth but you should complete the whole process before April 15 and possibly might want to delay your tax filing
a bit. Also you should not have done a similar rollover from this account (or perhaps any account?) within the last 12 months.
You can move the whole 6988 but might want to talk to the receiving institution about your plans to make sure they are
agreeable to doing this.
You will want to file a narrative w/ your tax return describing the recharacterization. see p.3 here
http://www.irs.gov/pub/irs-pdf/i8606.pdf
Re: I need help with my IRA's Contribution
Thanks Kaneohe for your response,
The way I understand your post is to open another TIRA account and role over the money that I withdrew from my current TIRA account into it,
Then characterize within 60 days and roll over to Roth, is that correct?
The way I understand your post is to open another TIRA account and role over the money that I withdrew from my current TIRA account into it,
Then characterize within 60 days and roll over to Roth, is that correct?
Re: I need help with my IRA's Contribution
almost.........you need to rollover within 60 days and recharacterize to Roth before tax filing deadline. You might want to talkragabnh wrote:Thanks Kaneohe for your response,
The way I understand your post is to open another TIRA account and role over the money that I withdrew from my current TIRA account into it,
Then characterize within 60 days and roll over to Roth, is that correct?
to them first to see if they are agreeable to doing this since they (the receiving institution) don't know anything about
your original contribution. Usually folks recharacterize at the same place they contributed so you could also consider redepositing
at the original place where you made the contribution (as a TIRA rollover) , recharacterizing there to a Roth there, then transfering out later. The latter process should work; I'm not100% sure about the original method which is why I suggested talking to the receiving folks.