Here's the breakdown after using the search bar: I contributed the max amount to my Roth IRA at the beginning of the year. If understood correctly, I can pull out what's been contributed without penalty.
I also expect to have a previously unforeseen capital gains tax for 2025.
Here's the question: can I withdraw just enough of my previous contribution to the Roth IRA and deposit into an otherwise dormant Rollover IRA without violating the annual contribution limit? And if there's no violation, would I be able to claim the IRA contribution tax credit (assuming it's dollar-for-dollar) to heavily reduce or eliminate the capital gains tax?
My thanks in advance – and Happy Holidays!
Can a partial previous Roth IRA contribution be moved to a regular IRA by the end of the year to get the tax credit?
byu/TeacupWhaleShark inpersonalfinance
Posted by TeacupWhaleShark
2 Comments
Do not withdraw that does not reset your contribution amount. The easiest for you to do is call your broker asap (when they are open next) and have them recharacterize whatever amount you want from Roth to Traditional. If you dont have a traditional at that broker just as them to open it for you. You can do whatever you want with transferring or moving it later.
All that is going to do is lower your taxable income a little for the year. It will not do anything for your capital gains. The only way to lower or eliminate capital gains is to use capital loss.
What’s your AGI and do/did you have a 401k this year?