Dec 26

I just realized that I contributed $1000 to ROTH IRA , but I also contributed $4000 to Traditional IRA. I assume it is not ok, but I don’t know what I should do now. I don’t think it will affect my refund, but do I still need to file corrections? Thanks for any help!

2 comments so far...

  • Payroll Princess Said on December 26th, 2009 at 1:20 pm:

    If contributions to your Roth IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. A 6% excise tax applies to any excess contribution to a Roth or Traditional IRA combined. The additional tax is figured on Form 5329.

  • conusgypsy Said on December 26th, 2009 at 1:43 pm:

    You can contribute the full $5,000 if you are 50 or over. If you are not, then you will need to remove $1000. If your AGI is <99,000 single or $156,000 married, then I would take the $1,000 from the traditional IRA. You need to call the company that you invested the money with an request an “excess removal” form. Any earnings will be taxed, but not until you file next year’s return. You will get a 1099 for it.

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