Keogh Excess Contribution Penalty

[Kram BergGold]

My client deposited $1,000 to her Keogh in 2005. She is only allowed to deduct $705. As $295 is more than 6% of her compensation (there is a deminimus rule in the instruction I never knew about) she needs to pay a $29.50 penalty on form 5330. Keogh Plans (HR 10) I believe are Section 404. I see no reference to Section 404 so I am not sure if the calculation is done in Part II or Part VIII. Which is it?
PS. We don't want to bother removing the excess. It is simpler to jsut pay the small penalty.

[Bees Knees]

The instructions for Form 5330, Part II talk about the 10% Section 4972 excise tax penalty on nondeductible employer contributions to a qualified plan that exceed the Section 404(a)(7) limits, provided none of the exceptions apply.

So use Part II of Form 5330 to figure the penalty.