DanaB27
Expert Alumni

Retirement tax questions

You entered a $7,000 traditional IRA for you and a $7,000 traditional IRA for your spouse and got the excess contribution warning? Did you have enough taxable compensation to make the contribution (Wages, self-employment)?

 

For 2021 the total contributions you make each year to all of your traditional IRAs  and Roth IRAs can't be more than:

  • $6,000 ($7,000 if you're age 50 or older), or
  • If less, your taxable compensation for the year

 

If you have indeed an excess contribution then to avoid the 6% tax on excess contributions, you must withdraw:

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

 

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