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|Subject: Re: HELP! Excess Contributions||Date: 2/25/2002 5:12 PM|
|Author: OneLostFool||Number: 33882 of 77104|
Wow. I really appreciate all of the help you're all giving. At the risk of sounding like the complete amateur that I am with IRA's, here's the total situation.
I'm overseas, and using a 2555 (Foreign Earned Income Exclusion) which covers (sadly) all of my income for 2001. Since I'll be returning stateside this year, I won't be able to claim the exclusion for 2002 and will have to pay federal taxes, so I believe that I will qualify for the Roth contributions for 2002.
Here's the new questions your answers have planted in my bargled mind:
If I recharacterize to a traditional, will I later be able to change it back to a Roth or is it then set as a traditional until I retire? I ask because (using TMF's formula) I think the Roth is better for me in the long run. I don't know that I'll ever completely understand all the ins and outs, so I'm trying to make the most with my retirement savings while keeping it as simple as possible.
If I do recharacterize my contributions from last year into a traditional, can I contribute to a Roth for 2002, and will this be even more complicated when I withdraw the money at retirement?
Also, since I do not have taxable income at all for 2001, would I even qualify for the traditional at all? I suppose that's really the first question.
Thanks again for your help and patience.
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