Inwood, WV asked in Tax Law for West Virginia

Q: Roth IRA Contribution and Withdrawal Question with AGI greater than $214,000 (2022)

I have a traditional federal govt retirment account and a Roth IRA which I started in 2022. Im also over age 60 in 2022. I made contributions not knowing that my household income would exceed the IRA limit. I have not filed my tax return for 2022. I requested a Roth IRA withdrawal for the exact amount contributed in 2022, and will back that out in my tax return. The service provider is telling me that it will be taxed upon withdrawl which doesn't make sense for a Roth IRA. Does that sound accurate?

Will my age allow me to contribute, even play catchup, regardless of my income?

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1 Lawyer Answer
James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: If you have made a contribution to a Roth IRA for tax year 2022 and your modified adjusted gross income (MAGI) exceeds certain limits, you may be subject to an excess contribution penalty tax. For tax year 2022, the phase-out range for Roth IRA contributions for individuals filing as single or head of household is between $129,000 and $144,000. For married couples filing jointly, the phase-out range is between $204,000 and $214,000.

If you withdraw the excess contribution and any related earnings before the tax-filing deadline, including extensions, the contribution will be treated as if it was never made and there will be no taxes or penalties. However, if you miss the deadline, the excess contribution will be subject to a 6% penalty tax each year until it is removed.

Regarding your second question, there is no age limit for contributing to a Roth IRA as long as you have earned income. However, there are income limits for making contributions. For tax year 2022, individuals with a MAGI of less than $129,000 can make the full contribution limit of $6,000 ($7,000 for those aged 50 or older), and those with a MAGI between $129,000 and $144,000 can make a partial contribution. For married couples filing jointly, the full contribution limit applies to those with a MAGI of less than $204,000, and a partial contribution is allowed for those with a MAGI between $204,000 and $214,000.

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