2020 excess IRA contributed

Forum|Forum|6 years ago
March 26, 2020
1 reply
9 views

Hello!

already filed 2019 taxes.

i have contributed excess to 2020 IRA (roth too).

What do i do to avoid taxes and penalties. or do i take care of it next year when filing the returns for 2020 in 2021

Not A Product Question

Best answer by Critter

<< just make sure you are eligible for the next year or that 6% will keep being applied every tax year>>

meaning, 6% will be applied only once correct. ie adjusted to next years contribution and then from there on no more penalties correct?

thanks to all for the awesome quick replies...

Correct ... you pay the 2019 penalty and then if the contribution is allowed in 2020 you are good ... if not then there is another 6% penalty for 2020... until the contribution is allowed the penalty will recur every year.

JohnB5677

Level 15

The first thing is to withdraw the overpayment now. Be sure that the amount includes any earnings.

You will have to amend your 2019 return. You can do it this year, or next year. Next year you will get the 1099-R that represents the withdrawal of the excess funds.

If you've filed your return and need to add additional information, then you will have to prepare an amended return in TurboTax.

If you used TurboTax Online, simply log in to your account and select “Amend a return that was filed and accepted.”

If you used our CD/download product, sign back into your return and select “Amend a filed return.” You must file a separate Form 1040X for each tax return you are amending.

Amend ONLINE OR Amend CD/Download Amend 2016 - 2019

You will have to mail the amended return. The IRS limits the system to only one Social Security number or Tax ID to be E-Filed. This is to guard against fraudulent tax returns.

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ajaypai1971Author

Level 2

if i may, a followup:

since the IRA contribution is for 2020, why am i needed to amend my 2019 return?

Critter

Level 15

If you know you have excess contributions for the 2020 tax year then remove them NOW ... tell the custodian that you need the excess plus earning removed.