Hello,
Married filing jointly with AGI ~246k for 2025. My wife and I both contributed $7k directly to Roth IRAs (didn’t realize we were over the income limit). I also did a $7k non-deductible Traditional IRA contribution and filed Form 8606. I’m now fixing it by doing a “return of excess contribution” on both Roth IRAs (about $8.3k each including earnings), with no tax withholding, and then planning to proceed with backdoor Roth going forward. Does that sound like the correct way to clean this up without penalties or amending?
MFJ $246k AGI, accidentally contributed to Roth—returning excess and doing backdoor, correct approach?
byu/igriego139 intax
Posted by igriego139
2 Comments
BOTH of you contributed to Roth IRA, but only you ALSO contributed to Traditional IRA, correct?
If so, your wife has an additional option here (really, the ONLY option because it’s past the filing deadline), she can just recharacterize to Traditional IRA, to proceed with the backdoor, treating it as if it was Traditional to begin with.
This assumes you either filed an extension, or timely filed your return. If so, then you can do this.
If you simply return excess, then the door shuts on 2025 and she can’t contribute again, even if you filed timely.
Ya that sounds correct! Expect to get a 1009 R next year for the amount of the distribution with a code that indicates it was a correcting distribution. Because it was a Roth IRA no extra income needs to be picked up. I would just double check that no penalties are resulting from this as well. Some softwares are better at handling this than others without the form up front. But you are correct that no penalties should be assessed, assuming you filed an extension for your 1040.