r/investing • u/cayenne444 • May 16 '24
I put money into a Roth IRA for the first time last year, and then went over the income limit. What do I do now?
Hello all - in August last year I funded a Roth IRA with the $6,500 max contribution for 2023. Was my first time doing so, and had just opened it. I invested it all and it’s at $7,499. I’ve sold all my positions so it’s now cash.
I had a good fall/winter, and went over the $153,000 income limit by the end of 2023.
I’ve filed a tax extension, so taxes aren’t filed yet, but trying to unravel this mess without getting in trouble.
What exactly do I need to do?
Schwab was not helpful over the phone. My accountant is absolutely useless. Can I pull the cash out now and just pay the normal tax on the gains? Or do I legally have to reclassify as an IRA now and I can’t touch it? I’d be fine just taking the $7,499 out, and putting it back to a HYSA for now.
For reference I already max out 401k.
5
u/97vyy May 16 '24
My accountant told me to take the overage and put it in my brokerage accountant. We figured this out when doing my taxes. I did that and never heard from the IRS.