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<<<What happens if you thought you were OK to invest in a Roth IRA, but at the end of the year when you're doing your taxes, it turns out that because of raises and end-of-year bonuses, your AGI was too high?>>>

"You'll have to withdraw the excess contribution plus any earnings. The earnings will be both taxable and subject to a 10% penalty.

As an alternative, you can pay a penalty for making an excess contribution. That penalty is due every year there is an excess contribution in the account.

If you're getting close to the cutoff for Roth IRA contributions, it's easiest to wait until the end of the year to make your Roth contribution. The downside is the earnings on that money are not sheltered while you're waiting to make the contribution. So its a bit of an individual choice. Is the potential hassle of an excess contribution worth more or less to you than the additional sheltered earnings?"

Peter, could OP simply recharacterize the contribution (and file and 8606?)? No witdrawal, no current taxes, no early withdrawal penalty? Or does being past 4/15 eliminate that option for 2008?

Regards, JAFO
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