Can I withdraw early Roth IRA contributions if I exceed income limits?

You're right to be thinking carefully about this. Roth IRA rules can be tricky with income limits and withdrawal timing. First, you can always withdraw your original Roth IRA contributions (not earnings) at any time, tax and penalty-free, regardless of age or how long you've had the account. The warning is just a standard disclaimer since most people shouldn't touch retirement funds early. For your income situation, the 2024 Roth IRA contribution starts phasing out at $146,000 and is completely phased out at $161,000 for single filers. Since you're expecting to fall within that range, you'd only be eligible for a partial contribution. You have several options: 1) Wait until you file your taxes to confirm your exact MAGI, then withdraw only the excess portion before the tax filing deadline; 2) Withdraw all contributions now and decide later how much to put back once you know your exact MAGI; or 3) Consider a "backdoor Roth" conversion if you're fully above the income limit. The app warning is about earnings, which would indeed be subject to taxes and potentially the 10% penalty since you're under 59.5 and haven't met the 5-year rule. But your original contributions can come out anytime without penalty.

I went through something similar last year! Check out https://taxr.ai - it helped me figure out exactly what portion of my Roth contributions I needed to withdraw when my income unexpectedly jumped above the limit. I was freaking out about penalties but their analysis tool walked me through the exact calculations for my situation. What I really liked is that it looked at my entire tax situation holistically and showed me how different Roth withdrawal strategies would affect my overall tax liability. It even helped me figure out if I should withdraw just the excess or everything and do a backdoor Roth instead.

Just wanted to update everyone - I used taxr.ai to analyze my Roth IRA situation after seeing the recommendation here, and it was incredibly helpful! It showed me that I only needed to withdraw about $4,200 of my contributions based on my projected MAGI, not the full amount. The tool actually calculated the exact earnings attributable to that excess amount (about $320) and explained that I'd need to report those earnings as income on my tax return. It even generated the proper codes to use on my tax forms for reporting the withdrawal correctly. What I really appreciated was how it showed me various scenarios based on different possible year-end bonuses I might receive. Ended up saving me from withdrawing way more than necessary while still avoiding penalties. Definitely more sophisticated than what my regular tax software was telling me!

After struggling with the IRS for WEEKS trying to get clarity on my own Roth withdrawal situation, I finally found Claimyr (https://claimyr.com) and it was a game-changer. They got me connected to an actual IRS agent in about 20 minutes when I had been trying for days on my own. The IRS agent walked me through my specific situation and confirmed exactly what documentation I needed for my excess contribution withdrawal. There are some nuances about how to report these withdrawals that I couldn't find clear answers to online. You can see how it works here: https://youtu.be/_kiP6q8DX5c If you're confused about how the MAGI limits affect your specific situation, talking directly to the IRS clears things up way faster than trying to piece together info from random websites. Just make sure you have all your account details and income estimates ready when you call.

I need to apologize about my comment regarding Claimyr. I was definitely wrong about it being a scam. After getting disconnected FOUR times trying to reach the IRS myself about my own Roth conversion issue, I decided to try the service I criticized. They got me connected to an IRS agent in 17 minutes when I had spent over 3 hours trying on my own. The agent confirmed that my approach to handling excess contributions was correct and gave me the specific form references I needed. What was most valuable was getting clarity on how to document the earnings calculation for my specific brokerage. Turns out the way my particular provider reports things required a special note on my return that I never would have known about. Sorry for being so negative before. Sometimes it's worth paying a bit to save yourself a massive headache.

Something nobody mentioned yet - have you considered just reducing your MAGI to stay under the limit? Max out your 401k if you haven't already ($23,000 for 2024), contribute to an HSA if eligible ($4,150 individual), or look into if your employer offers any other pre-tax benefits like dependent care FSA, commuter benefits, etc. Might be easier than dealing with withdrawals and recalculations if you're close to the threshold. I was in a similar situation last year and managed to drop my MAGI just enough by maxing these pre-tax options.

I think there's some confusion in this thread. The 5-year rule for Roth IRAs has TWO different applications: 1. For CONTRIBUTIONS: You can withdraw your contributions anytime without penalty regardless of the 5-year rule. 2. For CONVERSIONS and EARNINGS: The 5-year rule applies here. Each conversion has its own 5-year clock, and earnings require both 5 years AND being 59.5 years old to avoid penalties. In your case, since you're only withdrawing contributions, the 5-year rule doesn't matter at all. The app warning is just a generic message they show everyone. Also - if you're close to the income limit, consider contributing to a Traditional IRA and then doing a Backdoor Roth conversion rather than dealing with partial contribution calculations.