My new salary kicks in starting on my next paycheck which puts me over the limit of contributing to a Roth IRA. Do I need to immediately stop and open a traditional IRA or can I wait till the tax year is over?

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Posting as :
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Are you annualizing your new salary? That’s not how it works. It’s based on what your w-2 wages are for the year.

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You can’t put anything into a Roth directly this year. If you are going over for 2021, you need to have the brokerage remove everything plus earnings from Roth. You can then put 6k in traditional and convert. You will be taxed on earnings

likesmart

It’s for the entire year earnings when hit the MAGI. Google it and read the IRS article, but would recommend fixing before the 4/15 filing deadline since it can take a while to calculate earnings, etc.

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Salary is meaningless. Look at your actual annual income in 2021.

It depends on what you expect to see on your 2021 W2. My estimate is that I will be over the limit. So I had to request a return of excess contribution and paid the tax and penalty

Penalty is applied when brokerage doesn’t know it can be recharacterized and offset by earning/losses to become your non deductible contribution which is then sent to Roth.

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