Hello - I currently make 120,000 pre-tax and will be reaching the full $19,500 401K limit by end of the year. For the year 2020 I have contributed the maximum $6,000 Roth IRA limit.
My question is what happens if I were to get a new job this year making 150,000? That would put me over the Roth IRA salary limit. Since my Roth IRA is already fully funded for 2020… do I need to move whatever I contributed back into my taxable brokerage account?
Possibly. If you end up being over the MAGI contribution limit (starts phasing out at $124,000), then you would have to “recharacterize” your Roth IRA contribution. You can call your broker and tell them that’s what happened and it’s a pretty simple process to fix.
BUT my back of the napkin math says you’ll probably be OK? If you made $120K for 7 months, and $150K for 5 months, that is a total of $132,500. Minus the $19,500 you contributed to the 401k (assuming it’s a traditional 401k, that reduces our MAGI) gives you $113,000. Well under the limit.
I’m not a CPA, and at your income level it’s probably worth running this stuff by one. 
I forgot to mention… I may be getting a bonus in Feb for 2020 which may be putting me over $136k. I guess I will call Fidelity and see how I can move the money from Roth IRA into my brokerage and pay the taxes on the small gains.
Yep… You also may be able to “recharacterize” it as a (non-deductible) Traditional IRA contribution. Then 2 seconds later convert that traditional IRA to a Roth IRA. Then you just completed the “backdoor Roth IRA”. It gets stickier if you already have money in a traditional or rollover IRA because you have to convert that money “pro rata” (in proportion) to how much is pre-tax post tax. Fidelity is pretty helpful with this stuff… since it’s like their job and everything