Subject:  Roth IRA
From:  Neeraja Kichchnna
Date:  Fri, 15 Oct 1999

My Name is Neeraja Kichchnna. I live in Austin, Texas and I talked to you last week over the phone.

I have a question about Roth IRA.

I have a ROTH IRA account with some amount in it. I know that, for the tax year 1999, I have time until April 2000 to contribute $2,000 into that account I already have. If I contribute the $2,000 today, and after I do my taxes in April 2000, I realize that I do not qualify because of our joint income being more than that certain level, what happens to the $2,000 I contributed, and also what happens to the ROTH IRA account?

Can you please give me your opinion?

Thank you,
Neeraja Kichchnna

Answer

Hello Neeraja,

You will be allowed to reverse the contribution to the Roth account up to the extended due date of your 1999 income tax returns. Any earnings relating to the contribution will also have to be distributed.

I wonder if Congress had any idea how complicated this would turn out to be when they enacted these provisions?

Good luck!
Mike Gray

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