Re: 2018 Excess Contribution

I opened ROTH IRA in 2018. For 2018, my MAGI is $124,000 so I calculated allowed contribution and excess contribution. In 2018, I contributed $5,500. I calculated allowed contribution based on MAGI of $4,000 and the excess contributions of $1,500. No withdrawal. Please comment if my calculations were correct. Thank you!

posted

Assuming your filing status is single then

TurboTax calculates the excess to be $1460.

That would result in a 2018 6% penalty reported on a 2018 5329 form of (1460 X .06 = $87.60.

If never removed then that penalty will repeat for each subsequent tax year until removed. Each tax year must be reported and paid of the 5329 form for that tax year.

If the excess is still in the account then you owe a total penalty of $350.40 for 4 years and will repeat again for 2022 if not removed by Dec. 31, 2022.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**