DanaB27
Expert Alumni

Retirement tax questions

To clarify, you rolled over funds from the 403b to Traditional IRA and the converted this to Roth IRA?

 

You do not enter the rollover or conversion as IRA contribution. Just enter your Form 1099-R and answer the follow-up questions carefully.

 

Please be aware, you can only make IRA contributions if you have taxable compensation. If you do not have earned income and make IRA contributions you will have an excess contribution.

 

Excess contributions are taxed at 6% per year for each year 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 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 (IRS).
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