Over-contributed to IRA's, now what?

- O
- oprah.chopra
  
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posted
16 years ago

Tue, Oct 30, 2007 3:26 AM

I opened a ROTH and traditional IRA a few years ago when my yearly income was around 60k. I put 3k/year in them. Now my yearly income has doubled, but I never changed my contributions. I have around 18k in the IRA's. I have stopped putting any more money in them, but how do I go about calculating how to fix this mess? Seems like such a nuisance since you can hardly contribute much to these IRA's and then they have all these complex rules on how much you can contribute based on your income...

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- B
- Benjamin Yazersky CPA
  
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posted
16 years ago

Wed, Oct 31, 2007 3:47 AM

You should clean this up asap. You could be subject to penalties.

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- H
- Harlan Lunsford
  
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posted
16 years ago

Wed, Oct 31, 2007 3:47 AM

I don't know how many "a few years ago" is, but maybe. 3? 4?

If you for any one year put 3k in each of them, then that was too much. I would suggest you engage professional tax assistance when preparing your return next time so that he can advise you how much you need to withdraw, and prepare the form 5329 to go with your return with the excise tax penalty. However; if you grovel enough with a letter requesting abatement you just might have a fair chance in getting the excise taxes rebated. Obviously I can't advise you without the yearly amounts and facts in a forum here, but do recommend you seek out the services of either an Enrolled Agent (EA) or Certified Public Accountant (CPA) next tax filing season. ChEAr$, Harlan Lunsford, EA n LA