The Money Mustache Community
Learning, Sharing, and Teaching => Taxes => Topic started by: BrendanP on March 10, 2017, 04:31:51 AM
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Hi all,
I had some quick questions about RothIRAs.
My understanding is that I DO NOT need to submit anything for the the Roth IRA with my tax forms . I use H & R Block to file my taxes online and they used 2 different worksheets to check my contributions - but it doesn't appear that they are actually filed with the form.
I also want to know what records I personally should keep over the years. My wife's RothIRA was started many years ago by her father, and I do not know the contributions, etc. and would have to contact Fidelity to get all of the info.
Or do the companies keep all of the records, and I just don't even need to worry about this during my building phase?
Thanks in advance!
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If you are planning on something like a Roth ladder... you will want to know the total amount of contributions (as opposed to growth/dividends). You are able to withdraw the contribution amounts penalty free at any age. Growth/dividends may be withdrawn tax-free, penalty-free at age 59.5.
In other words: The main records you will want is amount of contributions.
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The companies keep all the records. However, if you use multiple brokerages like I did over the years, you will have some work on your hands when you attempt a Roth Principle rescue (I wrote about my experience on my blog).
I don't think there is much you need to do in tax software other than entire the contributions you made for the year. Distributions are a bit more involved, but aren't that bad from my experience. At some point I had to check a box on the software that denoted the distributions were a "return of contributions."
Hope that helps.