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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: PRMUSTACHE on March 22, 2016, 03:02:21 PM

Title: Tax Question
Post by: PRMUSTACHE on March 22, 2016, 03:02:21 PM
Hey Guys!

First time posting here! I have a few questions regarding my IRA's. I made an excess contribution for 2015. As long as I take out the excess plus earnings before April 15th, will I be okay? In addition, I forgot to add a re-characterization from a ROTH IRA to a traditional IRA in my 2015 tax returns. What are the steps to fix this.

P.S. I had an earnings loss during this re-characterization if that matters.

Title: Re: Tax Question
Post by: Axecleaver on March 23, 2016, 11:34:31 AM
Yes, I had a similar situation in 2015. You simply write a letter of instruction to return the excess.

Not sure what the doc rules are for re-characterizing, hopefully you get a response to that part of your question.
Title: Re: Tax Question
Post by: jda1984 on March 23, 2016, 03:13:11 PM
Re: the recharacterization, it probably depends on your investment firm.  I had to re-characterize some early 2015 deposits to count toward tax year 2014 with Vanguard and it was relatively painless.  It did require a phone call though.  I imagine recharacterizing from Roth to traditional will be easier than the other way, but I may be wrong.  I'd give your brokerage/investment firm a call.