Announcement

Collapse
No announcement yet.

Excess Roth Contribution

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Excess Roth Contribution

    I had posted this question on another website once before but probably was not specific enough. Situation: Husband and wife contributed $4000 "each" to a Roth for "2005 but because of income limitations they were only allowed to contribute $2000 each. Your response will be greatly appreciated as I have this work pending.

    Questions:
    1. Can I assume they must each withdraw $2000.00?

    2. Does the earnings pertaining only to the $2000.00 also have to be withdrawn?

    3. Is the excess contribution of $2000 each subject to 6% penalty and reported on form 5329? Seeing that it's a joint return, can I include all the withdrawal ($4000.) on one #5329?

    4. How are the "earnings" reported? Create a form 1099 and amend the return for 2005 including a 10% penalty for early withdrawal?

    5. Will there also be a charge for 2006?

    #2
    Excess Roth Contributions

    It would greatly simplify this situation to have the Custodian issue the withdrawal and hold back payments for penalties and issue 1099's as needed. Yes at this late date their would be penalties fpr 2005 and 2006.

    Comment

    Working...
    X