Excess IRA contributions (traditional/roth)

[mblatour]

I have a new client (57 years old) who met with her investor and decided 2 weeks ago to contribute $6,000 to a Traditional IRA and also $6,000 to a Roth IRA. She already contributed $1,960 to her 401k plan through her employer. She told me that she designated the $12,000 to 2011; but I want to confirm this with her investor as she seemed bit confused about my question of which year she's designated it towards.

I'm sure I need to call her investor, but being as this is a weekend and time is running out, I was hoping one of you could recommend what she should do to perhaps decrease or avoid the penalty she is facing. Thanks for any direction you can give me!

Becky

[Gretel]

Are the income limits any problem for maximum contribution? If not it is pretty much the client's choice to withdraw either one, depending if deduction is desired or not.

I believe there is no penalty if withdrawn by April 15 (contribution plus earnings).

[joanmcq]

Gretel is right, no penalty if withdrawn by April 17. If both contributions were made in 2012 for 2011, one could be changed to a 2012 designated contribution.

[DonPriebe]

Married and one of the accounts was for her spouse?

[BP.]

If the decision is made to leave the contributions in, and use the excess as deductible next year, I found TTB 13-11 useful. Copied the page, put it in client's file last year after we determined she had made excess contributions, and there it was this year for me to remember and correctly report.