My gain in 2018 IRA was $27,000 but I didn’t work in 2018 and this year and. I saw my TD Ameritrade IRA maximum contribution for 2019 is $7000. I just contributed $4000 but I really don’t know it is legal or not? Please let me know I am illegible make a legal contribution in 2019 without penalty Best Regards,
Contributions to a traditional IRA are based on *EARNED* income. As I understand it, you had no earned income in 2018. Therefore, your allowed contributions for 2018 was zero. Same will hold true for 2019 if you don't have any "EARNED" income during the entire tax year.
Earnings on the account are irrelevant for tax purposes, until you take a withdrawal from the account.
Since I saw in my TD Aneritrade IRA: my maximum contribution in 2019 is $7000 and I contributed already $4000 and I never use this $4000 to buy any stock.
Therefore; would you let me know how I can withdraw back $4000 without penalty.
Kim-Dung T Doan
If coded correctly, you won't pay a penalty, but you will pay taxes on any earnings from that $4000. When you withdraw it, you also need to withdraw the earnings of that $4000. So you'll have to talk with the account administrator about figuring out what that earnings amount will be on the date of withdrawal.
If the the IRA gained value while the $4,000 was in the account, the gains distributed will be taxable. If you are under age 59½ at the time of the return of contribution, the taxable gains will be subject to a 10% early-distribution penalty.
There is still more than half a year left in 2019, so if you happen to work and and enough in the remainder of 2019 to support the $4,000 contribution for 2019, you can leave the contribution in.
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