You can do this, but why?Hi I'm hoping to confirm that I can do the following.
I made a $7K 2025 contribution to my tIRA last month. For planning purposes, it would be advantageous to make the 2025 contribution later (probably February 2026).
Its my understanding that I can withdraw my contribution (all or partial) now, with any gains becoming taxable income (this should be minimal). And then recontribute at a later date. I would probably only withdraw one-third or half of the $7K contribution.
Is this correct? Would I receive a 1099 for the taxable gains on the withdrawn contribution?
I believe this is the relevant IRS publication which seems to confirm that what I'm hoping to do is legal. But I'd be interested if anyone could give me a straightforward confirmation.
Thanks!
Are you concerned that your income will be too high for a Roth contribution for 2025? If so, you would probably remove the entire contribution as an excess contribution now -- or leave it in there and remove it next spring when you know exactly what your max contribution will be. You have gains as well which will be taxed if you remove the contribution now, whereas if you qualify for the contribution those gains will eventually be tax free.
Or perhaps, you have another planning reason, which might be addressed by recharacterizing the contribution to TIRA and do a back door Roth if you do not have any other TIRA balances.
Statistics: Posted by Alan S. — Thu Feb 13, 2025 10:11 pm