Roth Ira Penalty

[tripods68]

I haven't really follow the rules/regs on the income limit.

By the end of this year, our income will be mid $150K gross. I also making contributions to our ROTH and wife to her Traditional IRA. We are not maxing our contribution but close. Is there a limit or penalty for excessive contributions to both ROTH or Traditional IRA? What is the income limit, and how do i resolve excessive contributions?

[jIM_Ohio]

The key is not exceed the 5k yearly IRA max per person.

File taxes early to give you time to fix things before April 15.

File taxes and if you use turbo tax, for example, it will tell you if you over contributed. It will tell you the form to use.

What you will do is pull the over contribution out of the Roth and recharactorize it to a traditional IRA. No penalties or taxes if done on time (before April 15).

I did this once (recharactorization) when I tried taking a rollover and converting it to a Roth. I did my taxes in mid Feb and when it flagged the problem, I filed the form to T Rowe Price, they fixed it, and maybe 5-15 days later I was able to file my tax return well before the April 15 deadline.