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Retirement tax questions
(1) Sorry, I guess wasn't quite awake when I answered. Yes, it's 6%, not 10%. I'll correct my answer.
(2) Yes, you can recharacterize your contribution for 2017 to avoid it being an additional excess Roth IRA contribution added to the first one, but you'll still have the excess contribution for 2016 carried into 2017 that was not corrected in 2017.
(3) The 2016 Form 5329 and Form 1040X will be sufficient for your 2016 amendment.
Your 2017 tax return will include 2017 Form 5329 to report that the excess from 2016 went uncorrected in 2017 and will incur another 6% penalty for 2017. Your 2017 tax return must also include an explanation statement describing the recharacterization. If the resulting traditional IRA contribution is nondeductible, you'll have 2017 Form 8606 to report the nondeductible traditional IRA contribution for 2017. If it's instead a deductible contribution, you'll have the deduction on Form 1040 line 32 instead of a nondeductible contribution on Form 8606.
(2) Yes, you can recharacterize your contribution for 2017 to avoid it being an additional excess Roth IRA contribution added to the first one, but you'll still have the excess contribution for 2016 carried into 2017 that was not corrected in 2017.
(3) The 2016 Form 5329 and Form 1040X will be sufficient for your 2016 amendment.
Your 2017 tax return will include 2017 Form 5329 to report that the excess from 2016 went uncorrected in 2017 and will incur another 6% penalty for 2017. Your 2017 tax return must also include an explanation statement describing the recharacterization. If the resulting traditional IRA contribution is nondeductible, you'll have 2017 Form 8606 to report the nondeductible traditional IRA contribution for 2017. If it's instead a deductible contribution, you'll have the deduction on Form 1040 line 32 instead of a nondeductible contribution on Form 8606.
‎June 6, 2019
10:18 AM