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Greetings, AirCal, and welcome. You asked:

<<Last year I opened Roths for my wife and myself, contributing $2000 to each account with an joint annual income of approximately $120K. This year I contributed $2000 to each account in January. My financial situation has improved, and it looks as if I could possibly exceed the $150K AGI limit and maybe even the $160K phase out limit (!). If so, will I be in trouble from the IRS stormtroopers? Can I invest this year's $2000, make wads of dough in the market, then in 2000 apologize and withdraw the $2000 without penalty if I in fact hit the big time this year?>>

You have until April 15, 2000, to "undo" a 1999 Roth Contribution that no longer qualifies as such because you exceed AGI limits for the year. Your IRA provider can tell you what to do. In essence, you must ask that the original contribution be "recharacterized" as a contribution to a nondeductible traditional IRA and that the contributions and all earnings be transferred to a traditional IRA for that purpose. If you do that, then the original contribution will be redesignated as one made to a nondeductible traditional IRA instead of a Roth. As a result, you will have no problems with Uncle Sammy.

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