netskip
New Member

Retirement tax questions

I made the same mistake.

Contributions to Roth IRAs are only allowed if your income is below a certain threshold.  I think that threshold is $130k.  If I recall correctly, $390 has to be paid in tax every year that you haven't corrected the excess contribution.  Let me repeat that:  Not only do you owe more tax this year, you will owe more tax next year and the year after that because of the one contribution for 2018, unless / until you withdraw the $6500 and all the earnings on that excess contribution.

You can still correct the problem by reversing the contribution and earnings before the tax filing deadline.  You'll need to send a request to your broker.