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<<Our AGI hovers around $150k. If we open Roth and Education IRAs with full contribtions early in '97 and end up with an AGI in the middle of the phase-out range, what happens? What if we are over the top?>>

No big deal if you take appropriate corrective action. Take the money out (including earnings) by the due date of your 1998 return and you won't have any penalties. Of course you have to pay tax on the earnings.

If the technical corrections law goes through as expected you'll have another option for the Roth contribution: transfer it directly to a regular IRA (with earnings). That way you're not taxed on the earnings.

KAT in Chicagoland
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