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05-22-2007, 05:15 PM
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Roth IRA - complicate taxes?
Hi,
I love doing my taxes because it's easy - I just do the EZ forms. Really, taxes are not hard for me - I live in an apartment, there's not much opportunity for tax breaks for me. Now I have a Roth IRA - do I need to do anything special if I just leave my money growing in the Roth and don't touch it? Any new forms to fill out? I'm 25 years old. Thanks 
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05-22-2007, 05:49 PM
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No you don't have to do anything special and no there aren't any new forms you need to fill out.
__________________
The easiest thing of all is to deceive one's self; for what a man wishes, he generally believes to be true. - Demosthenes
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05-22-2007, 06:48 PM
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Contributing to a Roth has no impact on your taxes since the money is going in after taxes and the earnings within the account aren't taxable ever (by current law). So contribute as much as you can ($4,000 max this year if you are under 50) and enjoy.
__________________
Steve * Despite the high cost of living, it remains very popular. * Why should I pay for my daughter's education when she already knows everything? * There are no shortcuts to anywhere worth going.
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05-22-2007, 07:11 PM
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the only way it would make a difference is if you qualify for the Saver's Credit, in which you would need to file 1040A
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05-23-2007, 07:03 AM
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No - there are no tax forms.
BUT you need to keep good records of your contributions (since they are not reported on any forms) for your own records. Just FYI. But that's the only complication of it. In 40 years you will definitely want to know how much you contributed to which type of IRA because no one else will b e tracking this for you. I just saw an article to keep your tax return forms that related to IRAs FOREVER. Which is a good point. Written records as well, since you don't report ROTH contributions on your tax return.
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05-24-2007, 06:28 AM
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If you catch it before the April 15th deadline, you submit a request to take the money back out (to broker/where money is kept).
It can get complicated though, we had a huge discussion on this a while back. & I had a couple of clients this last year who did this and it caused a headache and a half. I don't even remember why and what the complications were, but it led to great debate here. It CAN get complicated. Overall, technically if the money you over-contributed created a gain, you have to report the gain as income. If it's a loss, nothing. If you can just roll it to the following year is by far the easiest, but not so simple if you are above the income limits. Then I think is when it gets more complicated. But if you take it out before April 15th (following year) is key. Afterwards, then you have to pay penalties on it too.
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