Taking money out of a Roth When You Deposited Too Much

[ny96]

We made a mistake last year of fully funding our Roths when we were above the income limits and could only contribute about $1500. We’ve paid the penalties and now we need to take the money out of our Roths. Where do we put the money without paying a withdrawal penalty? Can it just be rolled into our regular IRAs which we will then do the “backdoor” maneuver for this year and essentially put it right back into our Roth (along with the rest of the allowable contribution).

[Pom]

This is the time I would call Fidelity (or whomever you utilize) to ask the process. I am certain this happens often.

[noodleoo]

Feb 27, 2024 14:47:31 GMT -5 Pom said:

This is the time I would call Fidelity (or whomever you utilize) to ask the process. I am certain this happens often.

Yup, this.  We made a mistake last year and Vanguard was able to walk us through recharacterizing the contributions over the phone.  They even filled out all the forms and we just signed them electronically through the website.  It was easier than I expected, but did require being on the phone for a while.

[ny96]

Thanks, I’ll call Schwab.

[protozoa]

Coming in late but for anyone in the future - yes you can recharacterize, then do the backdoor transfer. Have done this a few times.