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Retirement tax questions
Since the excess was removed in 2019, there will be *no* 2019 penalty to pay at all. It is not possible to report and pay a prior years penalty on a 2019 tax return.
A 2017 penalty can *only* can only be reported and paid on a 2017 5329 form, likewise for a 2018 penalty.
Either whoever you talked to did not understand the situation, that this is not a 2018 contribution removed in 2019, or they answered incorrectly.
IRS 5329 instructions:
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i5329.pdf">https://www.irs.gov/pub/irs-pdf/i5329.pdf</a>
"Prior tax years. If you are filing Form
5329 for a prior year, you must use the
prior year's version of the form. If you
don’t have any other changes and
haven’t previously filed a federal income
tax return for the prior year, file the prior
year's version of Form 5329 by itself
(discussed earlier). If you have other
changes, file Form 5329 for the prior
year with Form 1040X, Amended U.S.
Individual Income Tax Return."
Because, there will be "other changes" - the added penalty and overall tax due - amending is necessary.
A 2017 penalty can *only* can only be reported and paid on a 2017 5329 form, likewise for a 2018 penalty.
Either whoever you talked to did not understand the situation, that this is not a 2018 contribution removed in 2019, or they answered incorrectly.
IRS 5329 instructions:
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i5329.pdf">https://www.irs.gov/pub/irs-pdf/i5329.pdf</a>
"Prior tax years. If you are filing Form
5329 for a prior year, you must use the
prior year's version of the form. If you
don’t have any other changes and
haven’t previously filed a federal income
tax return for the prior year, file the prior
year's version of Form 5329 by itself
(discussed earlier). If you have other
changes, file Form 5329 for the prior
year with Form 1040X, Amended U.S.
Individual Income Tax Return."
Because, there will be "other changes" - the added penalty and overall tax due - amending is necessary.
**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.**
June 4, 2019
8:01 PM