I accidentally deposited $2500 in my Traditional IRA account last week instead of my ROTH IRA. Since I have not still filed my taxes, I havent gained any tax benefit yet.
Can I transfer the amount from my traditional IRA to my ROTH IRA account, and file my taxes as a ROTH contribution?
When I made a similar mistake a couple of years ago, I contacted the trustee that held the accounts who agreed to back out the mistaken contribution and credit it to the other account.
Better call them ASAP to they can do it by the 15th, though.
When I made a similar mistake a couple of years ago, I contacted the trustee that held the accounts who agreed to back out the mistaken contribution and credit it to the other account.
Better call them ASAP to they can do it by the 15th, though. ===========Agreed: Must be fixed by the 15th if this is for the 2013 year.
[Why people wait until tax time instead of making a contribution on January 1 (and fixing/reversing it later, if needed), thus wasting 15.5 months of potential investment, is beyond me.]
Sometimes you just forget. Then when you're in the tax prep software, it reminds you that you can still make a contribution for the previous year.
The process of "fixing/reversing" it is not always simple or painless.
One could just as easily be avoiding 15.5 months of potential loss by waiting.
And finally, as I pointed out the last time D. Stussy made the same comment, it's only a one-time missed opportunity, for the first year contribution. After that, if you continue to make annual contributions, you are not losing ("wasting") anything.
Or - not knowing if the deposit will be deductible, one decides to wait until return time, not wanting the non-deductible deposit to the IRA.
Maybe they don't know what the next years income will be on Jan 1. ==========That's why one fixes it later. Recharacterizing a contribution between a traditional and Roth accounts shouldn't be a problem, especially when both account types are at the same custodian.
Some of us po' folks fund our IRAs from the money we make during the year, so we don't have the full contribution 15 months before it's due. And sometimes we po' folks find out late in the year that we're rich folks, so we can't make any Roth contribution at all.
R's, John
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