DanaB
Expert Alumni

Retirement tax questions

Please be aware that your Roth IRA contribution might be limited based on your filing status and income. If this resulted in an excess contribution the penalty is 6%. Please see 2018 - Amount of Roth IRA Contributions You Can Make for 2018 for the contribution limits to a Roth IRA. 

Excess contributions are taxed at 6% per year as long as the excess amounts remain in the IRA. The tax can’t be more than 6% of the combined value of all your IRAs as of the end of the tax year.

To avoid the excess contributions tax:

  • withdraw the excess contributions from your IRA by the due date of your individual income tax return (including extensions); and
  • withdraw any income earned on the excess contribution.