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Dear Fools,

I have two brokerage accounts. One is a regular account, and one is a Roth IRA account. I would like to transfer the 2000 yearly maximum ($2000) cash from my regular account to my Roth IRA as early as possible in January. Are there any restrictions I haven't yet read about that would prevent me from doing this?

I would think the IRS might object because I won't have earned any income from which to make the deposit...it is money I had in my account from 1999 earnings. I'm pretty sure I won't be elevating myself to a tax bracket that will phase down or phase out my allowed contributions to IRAs any time in Y2K.

Any thoughts?

Thank you,

Nat

p.s. e-mail replies are welcome at:
njolsson@yahoo.com
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I would think the IRS might object because I won't have earned any income from which to make the deposit...it is money I had in my account from 1999 earnings.

AFAIK, the IRS only cares that you have earned income in the year for which the deposit is made, not that the income be earned before the deposit is made.
I make my ROTH IRA contributions early in January as well.
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<<I have two brokerage accounts. One is a regular account, and one is a Roth IRA account. I would like to transfer the 2000 yearly maximum ($2000) cash from my regular account to my Roth IRA as early as possible in January. Are there any restrictions I haven't yet read about that would prevent me from doing this?

I would think the IRS might object because I won't have earned any income from which to make the deposit...it is money I had in my account from 1999 earnings. I'm pretty sure I won't be elevating myself to a tax bracket that will phase down or phase out my allowed contributions to IRAs any time in Y2K.>>

As pointed out, the year is taken as a whole...not just one specific point in time.

To use an extreme example, you could make your Roth IRA contribution on January 1, 2000, but have no earned income until December 31, 2000. Regardless, your Roth IRA contribution would be valid (assuming that you didn't violate the AGI limitation rules and were qualified for a Roth IRA).

Again, the year is taken as a whole...not just a snapshot at any specific time.

TMF Taxes
Roy

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