At the beginning of last year, I contributed the maximum amount to my Roth IRA, as I typically do. Late in the year, I received a very unexpected and very large bonus. I realized when I got my 1040 this week that the bonus will put me over the MAGI limit for Roth IRA contributions.

What do I do now?

I'm single and do not currently have a traditional IRA or 401K, if any of that is relevant.

  • 1
    Related, possible duplicate: money.stackexchange.com/q/62871/36669
    – yoozer8
    Commented Jan 10, 2019 at 23:31
  • Sorry for the duplicate post. To be honest, I read the previous one, but got confused by all the additional details and talk of traditional Roth conversion, etc. in that question.
    – guest
    Commented Jan 11, 2019 at 14:24
  • It's not really a duplicate, because for that question they can no longer recharacterize. But for this question the OP is still before the tax filing deadline and so can recharacterize.
    – user102008
    Commented Jan 11, 2019 at 19:25

2 Answers 2


I did this myself a few years ago. Best path forward is to call your financial institution managing your Roth and let them know (Vanguard helped me sort out my over-contribution). You'll need to tell them the amount you are allowed to contribute (or conversely the amount of your contribution overage).

Generally they will need to run a calculation and determine how much money to remove from the Roth, which may include some interest earned (so it may be more than your original over-contribution that needs to be removed). They will send you a form with all the relevant info, which may include a tax assessment on the interest earned. You'll probably report that interest on this year's or next year's tax return.

It's not a big deal, just need to get the numbers right.

  • Thanks jaypop96. Looks like I have a call to Vanguard in my near future.
    – guest
    Commented Jan 11, 2019 at 14:13
  • no problem. I would suggest getting the excess removed sooner than later, because if your excess investment grows further in value, you may incur additional tax hits when you have to withdraw that interest and declare as income. Not talking huge amounts of money here, but could be a few dollars.
    – jaypops96
    Commented Jan 11, 2019 at 15:54

One option you have is to recharacterize your Roth IRA contribution as a Traditional IRA contribution. Basically this means pretend as if you originally made a Traditional IRA contribution instead of a Roth IRA contribution. There are no income limits for contributing to a Traditional IRA, so it won't be an excess contribution. (There are income limits for deducting a Traditional IRA contribution if your or your spouse is covered by a retirement plan at work, but you are not going to deduct it.)

Then, you would convert all the money in the Traditional IRA to a Roth IRA. There is no income limit for conversions either. (You are basically belatedly doing a "backdoor Roth IRA contribution".) Assuming you had no pre-tax money in IRAs (and won't put any pre-tax money into IRAs this year), during the conversion, the after-tax contribution portion of the Traditional IRA won't be taxed; only the earnings part since you contributed until the conversion (which is probably a very small amount) will be taxed. So the end result is basically the same as what you have now, with no penalties.

  • Does this still work if the account he's contributed to was a designated Roth IRA account, with a balance from previous years? That sounds like his situation. Not sure if the brokerage will let you re-write history like that, and say "oops that Roth contribution was actually supposed to be a traditional IRA contribution..."
    – jaypops96
    Commented Jan 11, 2019 at 20:24
  • @jaypops96: Yes. It doesn't matter what was in the account. A recharacterization to Traditional IRA contribution transfers the contribution (and proportional earnings from it) to a Traditional IRA account, and treats it for tax purposes as if it was never contributed to the Roth IRA account and instead contributed to a Traditional IRA account at the time the contribution was made.
    – user102008
    Commented Jan 12, 2019 at 0:46
  • @user102008 I now find myself in similar situation. In Jan. 2018 I made a $5500 contribution to my existing Roth IRA and now that I've done my taxes for 2018 I found that my MAGI was too high and I should have only put in $3100. Are you saying I should call Schwab and tell them to recharacterize the difference $2400 as being for a traditional IRA? I'd like to avoid having to amend my 2018 taxes which I haven't yet submitted yet Commented Apr 4, 2019 at 14:02
  • @publicwireless: Yes, you would recharacterize $2400 of your contribution, but that may involve transferring more than $2400 now, due to earnings between then and now, and earnings that are attributed to the $2400 contribution will also need to be transferred. You would need to use Worksheet 1-3 in Publication 590-A to calculate the amount, and your broker should help you with this.
    – user102008
    Commented Apr 4, 2019 at 15:19

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .