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What happens if I contribute to a Roth IRA in one year, projecting that my AGI will be under the limit, but it ends up actually being over the limit?

You have two choices:

1. "Recharacterize" the contribution and its earnings as a traditional IRA contribution and earnings. Your deadline is October 15 of the year following the tax year in question.

2. Withdraw the contribution and the earnings on it. You'll owe the 10% premature distribution penalty on only the earnings, if you're under 59 1/2. Your deadline is the due date of that year's return, not including extensions.

You can read more about these options in IRS Publication 590.

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