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Financial Planning / Tax Strategies
|Subject: Re: Modified Adjusted Gross Income||Date: 1/31/2007 10:12 PM|
|Author: TMFPMarti||Number: 91556 of 121585|
Does this mean there are no "MAGI" limits for a traditional IRA?
There are none. Whether a traditional IRA contribution is deductible depends on whether you were covered by a retirement plan at work. If either you or spouse was, traditional IRA contributions for 2006 are nondeductible, and you'll need to report them on Form 8606.
If not, then converting the 2006 contributions and earnings to traditional would seem to be the way to go. These were both new Roth accounts opened at Vanguard in 2006 so whatever the share balance was on 12/31/06 is what would have to be moved to a traditional IRA.
Sounds right to me.
If you don't leave things as they are, once you've decided what you're going to do you must abandon the interview mode in TurboTax and deal with forms if you want a prayer of getting it right. Let's just leave things where they are until you decide your course of action. Then start a new thread and we can help you with how to deal with it on your return.
I didn't save the changes to the return after entering the IRA data so I can start from that point once I get things straightened out.
You were Foolish not to save your return when you realized something was amiss. Don't get foolish now and try to attack this through the interview mode. The problem with interview mode is that you'll have to find a way to tell it that you made an excess contribution to Roth and have corrected it by.... You'll wind up pulling your hair out, if not worse, and still won't wind up with everything you need. You can trust me on this one or read up in Pub 590 and the instructions for Form 8606.
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