<< I started a Roth IRA in 1998 to get in on what I thought was a nice savings option and now find I was not eligble because I filed my taxes married and filing separately. I only noticed at the time that I was well within the adjusted income limitations. I have just learned, while preparing taxes this year on a computer tax program, that by using married filing separately status I would did not qualify for a Roth. I assume I could/should have done a regular IRA instead or filed jointly last year.Right.<< I am now preparing my 1999 taxes and paid into the same Roth this year. Is it best to keep my Roth, file 1999 married filing jointly, and go back and amend 1998 (tax/penalty??) or should I somehow convert the Roth to a traditional IRA for 1998 and forward? >>You can't recharacterize the 1998 contribution as a traditional--the deadline for that was 12/31/1999. Unless you and your spouse amend to a joint filing for 1998, you have an excess contribution (the 1998 one) which must be withdrawn, along with the earnings on it. In addition, you owe the penalty for excess contributions. Since most married couples come out at least even with joint filing, I'm wondering why you chose MFS.If you're going to file MFS for 1999, you must either withdraw the 1999 contribution and the earnings on it or recharacterize it as a traditional contribution.TMF ExROPhil Marti
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