Opening a Roth

[Guest droffart]

I mistakenly opened my Roth Ira with a deposit of $3400 dollars. My question is this: Does the $2000 per year limit mean just that, or can I put $4000 in this year, and nothing next year? If that is not allowed, do I need to withdraw $1400 now to get to the $2000 threshold? Thanks for an help.

[John G]

If you put in the $3400 before you filed your 1998 tax return, you may allocate $2000 to 1998 and the rest to 1999. This assumes that you qualified in both years.

[Kathy]

Although, technically, there must be a written, irrevocable election to treat a contribution made between January 1 and April 15 as a prior year contribution. If there was a written election, it should be irrevocable. If there wasn't, the whole contribution should be treated as a current year contribution. But, with that being said, in today's electronic age, it is difficult to attach a written election to a wire, so many IRA custodians are willing to take a telephone call stating that part of the contribution was for 1998 and part was for 1999.