Married Filing Separately and Roth IRAs
episode
DIY Money | Personal Finance, Budgeting, Debt, Savings, Investing
16 min
3 speakers
5 chapters
transcribed 1 month ago
Transcript
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Transcript generated automatically by AI and may contain errors.
What is the main topic discussed in this episode?
Hey, this is Daniel. Thanks for listening to DIY Money. If you haven't already, be sure to give us a five-star review on iTunes so your friends know that they can learn from the show. Now, enjoy the show.
Welcome back, ladies and gentlemen. You're listening to another edition of DIY Money.
DIY Money. What up, A. Howard? It is sunny. I've had a campfire the last three nights. I'm living life right now, Quint.
You are so granola.
What?
What do you mean? You live in an apartment building. How do you have a campfire? What are you talking about?
Because I went on a trip. Did you not notice I wasn't here on Monday or Tuesday? Come on, Quinn. Okay, where'd you go? I went to Bloomington, Indiana of all places. I found like a little mini house and I stayed there and they had a hot tub and a fire pit. So every night- Did you go by yourself? Yes. Oh, some personal time. A little getaway. Reflection. It was nice. Yes. I came back rejuvenated, but I would put on my swimsuit underneath my sweatpants and sweatshirt, and then I'd go down to the fire pit and make the fire. And then once I was like, you know what? I'm getting a little cold. Or if I was like, eh, not feeling it anymore, then I'd walk up the little hill and jump in the hot tub, do a little reading.
Nice. It was fire.
Pun intended. Why did you choose Bloomington, Indiana? Island.
love corn because they had a cheap airbnb and you were like cheap well and i thought about going to indianapolis because i wanted like a somewhat close city that i could go get coffee and i went hiking and i went climbing in bloomington as well and so i was going to go to indianapolis but then the airbnbs in bloomington were much cheaper and i realized you No disrespect to Indianapolis, but it's a big city. So my goal was to get away and to be really chill. So I felt like Bloomington would be a better fit.
I love it.
Good for you. It was fire.
I think, like, literally fire. I love, I think everybody should try. I know it's very difficult to get away. I did that recently myself, by myself. And I only get to do that every several years. I mean, the last time I did it was years ago. And business trips don't count. Like that is not that is not relaxing or refreshing. So good for you. Welcome back. Glad you got to do that.
Glad you missed me.
You're still a little granola. That's awesome.
That's fair. I'll take that.
All right, let's go. Well, we got a good question today. First of all, the housekeeping odds and ends. Check us out on social. Hopefully by the time this one comes out, we've now got some YouTube videos. I know we're working on that, trying to get all the specs dialed in there. Check us out on the YouTube page. Everyone is doing it. So hopefully that's, you know, that's live by now. But check it out. DIY Money podcast. And keep the questions coming. Podcast at DIYMoney.org. That's podcast at DIYMoney.org. We got a good one from Jacob today. Jacob, what do you got? D!
Hello, DIY Money Squad. This is Jacob from just across the river in Cincinnati. I got married this past year and we had planned on filing taxes as married filing separately because of my wife's student loans. I just found out that when you file like this, you cannot make more than $10,000 per year and contribute to a Roth IRA. Can you explain a little bit more about why this rule exists and what the best course of action would be since we have both already contributed to our Roths? Should we just file together and assume the loan payments will be manageable? Thanks for the help.
So Jacob, I am going to provide you zero value on this one. We're going to kick it right to the CPA, A. Howard. What do you got?
Okay, so this is a great question. Actually, I learned about this rule. I did not know this until Logan, who I should have put on this question too, brought it up to me right after a client meeting where if you file married filing separately, you can't contribute to a Roth IRA if you make more than $10,000. So basically, you can't contribute. Um, the other aspect of this question and why we picked it for the show was people over contribute, not necessarily to Roth's in this situation, but to IRAs pretty frequently.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–10:04
2
What is Jacob's Roth IRA and married filing separately question?
10:04–13:08
3
Why does married filing separately limit Roth IRA contributions to $10,000?
13:08–15:04
4
What are the three ways to correct an excess Roth or IRA contribution?
15:04–15:09
5
How do you withdraw an excess contribution and calculate earnings to avoid penalties?
15:09–16:14