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Say you already filed your taxes for the year and then realized you have some extra money in your savings account you would like to put away in a tax free vehicle, like the ROTH. As long as your MAGI is under the limit, can you just go to any online broker and open up a ROTH and not have to fill out some tax return related form?

Yes. I contribute to my Roth IRA every year, and nothing related to the Roth shows up on my tax return. I don't have to fill out any tax return related forms as long as I'm not taking any money out of the Roth.

However, I do need to keep records. If I end up taking a non-qualified distribution (essentially a withdrawal from the Roth before it has been in place 5 years or before I reach age 59 1/2, with various exceptions listed in Pub 590) I will need to know in detail how much I contributed in which tax years and how much I converted from traditional IRAs in which tax years.

I noticed one of the popular tax software programs asks that question during the return interview process. Is it too late after the fact?

The program is probably trying to find out if you qualify for the Retirement Savings Credit. If your AGI is greater than the limit for filing status (TY 2011: 56,500 MFJ; 42,375 HoH; 28,250 Single), you can't claim the Retirement Savings Credit anyway.

Patzer
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