Roth IRA question

[IronWing]

I setup a Roth IRA in January 2024. I made contributions for both the 2023 and 2024 tax years. My question is: what is the start date for the five year Roth clock? The obvious answer would be January 1st, 2024. However, the IRS rules state that the clock starts January 1st of the tax year for which the first contribution is made.

A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements.

1. It is made after the 5-year period beginning with the first tax year for which a contribution was made to a Roth IRA set up for your benefit.

Since I made a contribution for the 2023 tax year, would that set the start of the clock to January 1st, 2023?

Edit: there is also this example suggesting a January 1st, 2023 start date.

For example, if a calendar-year taxpayer makes a conversion contribution on February 25, 2024, and makes a regular contribution for 2023 on the same date, the 5-year period for the conversion begins January 1, 2024, while the 5-year period for the regular contribution begins on January 1, 2023.

Publication 590-B (2024), Distributions from Individual Retirement Arrangements (IRAs) | Internal Revenue Service

www.irs.gov

 

[dullard]

Not a tax expert, but websites seem to back up your earlier start date link. https://www.fidelity.com/learning-center/personal-finance/retirement/roth-ira-5-year-rule

"Since the 5-year rule starts the clock on January 1 of the tax year of your first contribution, this may, in practice, help you meet the aging requirement sooner. For example, if you contribute to a Roth IRA in April 2025 for the 2024 tax year, you may meet the 5-year rule in a bit under 4 years."

I realize this is too late of advice for you, but it might help someone else. This is one more reason to get things starts as soon as you can. HSA, Roth IRA, etc. Get the clocks ticking even if you only put a nominal amount of money in. Be cautious of fees though, don't just open an account without verifying that you won't be nickel and dimed to death.