Contributed to a Roth IRA....But I'm Married Filing Separately
In 2015 my wife and I both contributed ,500 (each) to a Roth IRA. We went to a bank, talked to an adviser and generally felt like we were doing the right thing. The website for managing the IRA even mentions the ,500 limit.
We've even contributed some smaller about for 2016. Everything seemed good.
But now I'm trying to do my taxes and we're married, but filing separately and my online tax software says, 'Whoa - you can't contribute to a Roth IRA' (both of our incomes are > 10k).
Now I'm on the IRS site and it seems like we can't contribute ANYTHING to a Roth IRA.
Am I understanding this correctly? I've read that excess contributions can just be 'withdrawn' - do I just need to pull out everything I've contributed? And what about the future - everyone I talk to seems to think a Roth IRA is the best thing since sliced bread, how should we save for retirement now?
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Yes, if you are filing MFS then the phaseout starts from [CO] income, i.e.: above K you're out of luck.
You can contribute to traditional (non-deductible) IRA, and then convert to Roth IRA using the backdoor IRA loophole. For the contributions you've already made - you'll need to recharacetrize them to be traditional IRA contributions.
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