mch_2 OP t1_jaa8tuw wrote on February 27, 2023 at 11:50 PM

Reply to comment by DeluxeXL in Do Roth IRA excess contribution removals need to be exact in $ value? by mch_2

I meant I don’t know the $900 part. I understand the Roth account provider will calculate the associated losses/gain that comes with the ~$900.

DeluxeXL t1_jaa94ug wrote on February 27, 2023 at 11:52 PM

The excess contribution is rounded to $10 per Pub 590-A worksheet. You need your MAGI.

You can remove more, or even the entire contribution. But the more you remove, the more penalty applies if you have a positive net income attributable to the contribution.

If you didn't have a gain, just remove all and re-contribute the full $6k to traditional IRA.

mch_2 OP t1_jabbdnm wrote on February 28, 2023 at 4:46 AM

I believe AGI includes this which is applicable for me:

net capital losses (up to $3000)

Both of these helped me reduce my AGI, but still a bit over the limit.

https://www.investopedia.com/terms/m/magi.asp says MAGI needs to remove deductions from "passive income/loss"... But not sure what that means, and if it includes (1).

The IRS worksheet 2-1 does not mention (1) so I think my AGI = MAGI?

I will definitely go the trad IRA/backdoor route in the future.. I do have losses for all $6000, so removing all seems like an easy solution?

DeluxeXL t1_jacgsnc wrote on February 28, 2023 at 1:13 PM

>I will definitely go the trad IRA/backdoor route in the future.. I do have losses for all $6000, so removing all seems like an easy solution?

Yes. If you have loss, remove all (note that less than $6000 will be moved out, but this is ok), recontribute $6000.