@SkipIntro wrote:
Thanks so much for your prompt and helpful reply.
One last quest for complete clarity.
I over contributed to the IRA by 4700$ and I should withdraw the excess contribution and any income it has earned to avoid the 6% excise tax. I realize I may owe federal income tax on the earnings and state taxes may also apply. Also, since I was funding both a traditional and Roth IRA, the IRS requires that I remove excess contributions from the Roth IRA first.
Do I need a corrected W2 or will I need other documentation from the withdrawal?
Thanks again for all your help.
Stop saying IRA.
Workplace plans are NOT IRAs even though they have similar purposes.
If you contributed to a pre-tax 401(k) and an after-tax designated Roth 401(k), those contributions are only reported on your W-2. You do not enter them again when you are asked about IRA or Roth IRA contributions.
You should be able to contribute up to $26,000 to your workplace plans without issue. But if you also entered them as IRA contributions that could easily cause an excess contribution problem. Likewise, if you contributed $26,000 to your workplace plans and also contributed to a private IRA, that can cause problems.
