BG2008 Posted February 20, 2014 Share Posted February 20, 2014 I want to take advantage of the IRA contribution early during the year so that the money can compound early on. Since investing is a full time job for me, it's unclear what my income will be for 2014. How do I choose between traditional vs Roth under these circumstances? 1) If contribute to Roth and income exceeds $181,000 for married filing jointly, then the contribution and earnings will have to be withdrawal or re-characterized as traditional. How does a re-characterization work? What is the penalty if the income is withdraw? 2) If contribute into a traditional and wish to convert into Roth at year end? What are the penalties and process? 3) Someone had mentioned that it's a good strategy to open up a separate account for the new contribution to isolate earnings associated with the new contribution. Thanks guys Link to comment Share on other sites More sharing options...
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