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What happens if I overfund a Roth IRA with tax free settlement funds?
I am limited by my small amount of earned income to less than the $7000 max contribution, however these funds I'd contribute to the Roth IRA are tax free anyway. Would there be some IRS penalty for the amount overfunded?
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April 17, 2022
1:36 PM
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Retirement tax questions
Yes. 6% of the excess that repeats every year until the excess is removed.
You can only contribute earned taxable compensation .
**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.**
April 17, 2022
1:54 PM
274 Views
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Retirement tax questions
You can only contribute up to the lesser of your earned income or $7000 if you are at least 50 years of age. 6% excise tax applies to excess contributions.
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April 17, 2022
1:58 PM
273 Views