3 ms·

The point is I don't know if it is financially a good idea or not (because: reasons) until I finish my taxes. So no extension for me :(

toomuchtodo 7y ago
You can file for the extension without filing your taxes. If it is a Roth IRA, you can remove the contributions at anytime penalty free (if you decide you didn't want to contribute the full $6000 amount for 2019). If it's a traditional IRA contribution, there is some complexity unfortunately. Also some complexity if you're at an income level where you're doing a "backdoor Roth", where you fully fund the IRA and then immediately convert to a Roth.
- servercobra 7y ago
  How does that work if you're over the income limit for Roth? I imagine a decent percent of HN is over that limit if single (and an even larger for traditional).
  - toomuchtodo 7y ago
    https://www.thebalance.com/what-to-do-if-you-contributed-too-much-to-your-roth-ira-3192888 https://www.thebalance.com/what-to-do-if-you-contributed-too... (Excess Roth Contribution) https://www.nerdwallet.com/blog/investing/backdoor-roth-ira-high-income-how-to-guide/ https://www.nerdwallet.com/blog/investing/backdoor-roth-ira-... (Backdoor Roth IRA HowTo)
- garmaine 7y ago
  In my case it's a SEP-IRA, which makes it significantly more complex. But the other factor is that for cashflow reasons I'd have to sell assets to make the contribution and take the capital gains tax (or maybe a loss... ugh) on that sale, which can't be reversed later. As to whether this makes financial sense, it depends on if I have an underpayment penalty, which I'd have to finish my taxes to figure out... So yeah, it's complicated. For reasons.
  - deleted 7y ago
    [deleted]
  - toomuchtodo 7y ago
    Edge cases suck. Sorry.
servercobra 7y ago
Same. I won't know whether I'm under the cutoff for various contributions until I finish my taxes.

3 ms·

The point is I don't know if it is financially a good idea or not (because: reasons) until I finish my taxes. So no extension for me :(

by garmaine 7y ago

toomuchtodo 7y ago
You can file for the extension without filing your taxes. If it is a Roth IRA, you can remove the contributions at anytime penalty free (if you decide you didn't want to contribute the full $6000 amount for 2019). If it's a traditional IRA contribution, there is some complexity unfortunately. Also some complexity if you're at an income level where you're doing a "backdoor Roth", where you fully fund the IRA and then immediately convert to a Roth.
- servercobra 7y ago
  How does that work if you're over the income limit for Roth? I imagine a decent percent of HN is over that limit if single (and an even larger for traditional).
  - toomuchtodo 7y ago
    https://www.thebalance.com/what-to-do-if-you-contributed-too-much-to-your-roth-ira-3192888 https://www.thebalance.com/what-to-do-if-you-contributed-too... (Excess Roth Contribution) https://www.nerdwallet.com/blog/investing/backdoor-roth-ira-high-income-how-to-guide/ https://www.nerdwallet.com/blog/investing/backdoor-roth-ira-... (Backdoor Roth IRA HowTo)
- garmaine 7y ago
  In my case it's a SEP-IRA, which makes it significantly more complex. But the other factor is that for cashflow reasons I'd have to sell assets to make the contribution and take the capital gains tax (or maybe a loss... ugh) on that sale, which can't be reversed later. As to whether this makes financial sense, it depends on if I have an underpayment penalty, which I'd have to finish my taxes to figure out... So yeah, it's complicated. For reasons.
  - deleted 7y ago
    [deleted]
  - toomuchtodo 7y ago
    Edge cases suck. Sorry.
servercobra 7y ago
Same. I won't know whether I'm under the cutoff for various contributions until I finish my taxes.