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Roth IRA, business loss, MFS


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Client put $700 into her Roth IRA for 2019.  No wages.  Business loss.  Filing status is married filing separately because her divorce was not final until early 2020.

Can she still claim that contribution as a "spousal IRA" or is she hosed?  The only thing I found was that MFS uses the single limits for income phase-outs for a Roth IRA.  

Worse comes to worse she will recharacterize to a 2020 contribution and only have to get back any growth.  Annoying; her business is cyclical and every few years she goes to a slew of shows and runs up huge travel expenses.  Good thing she was planning NO travel in 2020!  So that should be a profitable year for her.

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One solution is to leave it in and pay the 6% excess contribution penalty and then apply the contribution to 2020.  Of course, this only works if she has earned income in 2020, is not over the income thresh-holdings, and otherwise meets the contribution requirements. 

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