In 2015 my wife and I both contributed $5,500 (each) to a Roth IRA. We went to a bank, talked to an adviser and generally felt like we were doing the right thing. The website for managing the IRA even mentions the $5,500 limit.

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We've even contributed some smaller about for 2016. Everything seemed good.

But now I'm trying to do my taxes and we're married, but filing separately and my online tax software says, 'Whoa - you can't contribute to a Roth IRA' (both of our incomes are > 10k).

Now I'm on the IRS site and it seems like we can't contribute ANYTHING to a Roth IRA.

Am I understanding this correctly? I've read that excess contributions can just be 'withdrawn' - do I just need to pull out everything I've contributed? And what about the future - everyone I talk to seems to think a Roth IRA is the best thing since sliced bread, how should we save for retirement now?

  • 2
    Any particular reason you're punishing yourselves by filing separately?
    – littleadv
    Apr 4, 2016 at 1:14
  • @littleadv - My wife has a significant amount of student loans (like > 300k @ 7%). If we file jointly our student loan payments will increase by $1500 per month.
    – Rob P.
    Apr 4, 2016 at 2:20

1 Answer 1


Yes, if you are filing MFS then the phaseout starts from $0 income, i.e.: above $10K you're out of luck.

You can contribute to traditional (non-deductible) IRA, and then convert to Roth IRA using the backdoor IRA loophole. For the contributions you've already made - you'll need to recharacetrize them to be traditional IRA contributions.

  • So I can't just pull all the money out and pretend it never happened - I need to recharacetrize them? And I'm assuming this all needs to be done before I file taxes?
    – Rob P.
    Apr 4, 2016 at 2:35
  • I thought your question was about how to keep the Roth contribution, no? You can withdraw under "excess contribution" rules, by the tax day, but then you loose the year for your retirement savings.
    – littleadv
    Apr 4, 2016 at 2:39
  • I'm probably just wrong - I thought if I could empty the Roth IRA account and create a new IRA account, and contribute the same amount, I could avoid the needing the 8606 Form.
    – Rob P.
    Apr 4, 2016 at 2:41
  • @RobP. well, recharacterization would do just that without the need of withdrawing and depositing again. However, non-deductible IRAs are inferior to any other retirement saving. If you wanted Roth IRA anyway, why not do the conversion? Not sure I understand your confusion here.
    – littleadv
    Apr 4, 2016 at 2:43
  • The site I'm using (Fidelity.com) insists that none of my accounts are eligible for recharacterization. I'll probably have to call them. Thanks for all your help.
    – Rob P.
    Apr 4, 2016 at 2:46

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