Excess contributions to an IRA

By |2013-09-23T16:14:08+00:00September 23rd, 2013|

An excess IRA contribution is one that exceeds the combined deductible and nondeductible limits established by the IRS. If an excess contribution is not removed prior to the tax return due date (including extensions) by the contributing individual, the excess contribution is subject to the 6% excise tax in the year of contribution. The excess will be carried over and subject to excise tax each year thereafter until it is removed. It is the responsibility of the client to file Form 5329 to calculate his or her penalty.

 

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Bill Broich is a well-known annuity expert with over 30 years of experience. He has written hundreds of articles on annuities and other financial topics, and has been a featured commentator on TV, Radio and the Internet.

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