Timothy Sumer

In this video, we go over the steps to correct excess contributions made to a Roth IRA. We stress the importance of differentiating between traditional and Roth IRAs since the appropriate fixes depend on the type of IRA and when the contributions were made. We detail the four different methods of rectifying excess contributions to a Roth IRA, which include corrective distribution, recharacterization, ordinary distribution, and absorption. We clarify that although there is a six percent penalty for excess contributions, it only applies to the excess amount, not the total balance. It is highly advantageous to identify excess contributions early to avoid penalties and simplify the correction process. If you need help fixing excess contributions to a Roth IRA, this video provides a comprehensive guide to assist you. ///////////////////////////////////////////////// Get answers FASTER... Join this channel to get access to perks: Chat on discord: Join Link Support on Patreon:

Roth IRAs are getting increasingly popular as people see how sacrificing a small tax benefit now can lead to big tax savings later. This video reviews the guidelines for contributing to a Roth IRA, and shows how distributions are handled on the tax return. 2022 UPDATE: Roth IRA Contribution AGI phaseouts for 2022: $129,000 - $144,000 (S, HOH, QSS); $204,000 - $214,000 (MFJ) To learn the differences between traditional and Roth retirement accounts, click here: For a deep dive into what's on a 1099-R Form, click here: RESOURCES AND ADDITIONAL INFORMATION: IRS Form 8606: "Non-deductible IRAs": IRS Publication 590-A: "Contributions to Individual Retirement Arrangements (IRAs)": IRS Publication 590-B "Distributions from Individual Retirement Arrangements": Investopedia: "What is a Roth IRA?": The Tax Geek on Twitter: @taxgeekusa The Tax Geek on Reddit: www.reddit.com/r/askataxgeek Intro Music: "Bluesy Vibes"

Today's video covers Roth IRA withdrawal rules if you are age 59 and under. Check out our top ROTH IRA videos...👇 – : [ ]: “ ” ? [ ]: [ ?]: SUBSCRIBE to NOT being a transaction ever again... Like us on Facebook! Follow us on Twitter! What is a Roth IRA? A Roth IRA is an individual retirement account in which money grows tax-free. Roth IRA Withdrawals under age 59 1/2... You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. But, you may have to pay taxes and/or penalties on earnings in your Roth IRA, depending on the situation. Many use a Roth IRA for an emergency fund. If you take withdrawals from a Roth IRA, you've had less than five years. If you take a distribution of Roth IRA earnings before you reach age 59½ and before the account is five years old, the earnings may be subject to taxes and penalties. You may be able to avoid penalties (but not taxes) in the following situations: You use the