Tax Year Prior to 2020: Disallowed IRA Contributions

Forum|Forum|6 years ago
February 8, 2020
1 reply
13 views

Last year the IRS audited me and disallowed my 2016 IRA contributions. They amended my 2016 return and I paid all taxes on that income for that year. Since it wasn't supposed to be in there, I took the amount out of my IRA as part of the audit in 2019. I now have a distribution for 2019. How do I deduct that form my income 2019 so I don't pay tax on it again?

dmertz

Level 15

What was the reason that your 2016 contribution was disallowed?

Was your contribution for 2016 in excess of $5,500 (plus an additional $1,000 if age 50 or over in 2016)?

JEvoyAuthor

Level 2

I was covered under my employer's 401(k) program, so should have put the money in there. You cannot put money into a traditional IRA when you have a 401(k).

VictorW9

Level 7

If you have a 1099-R, the code in box 7 tells if taxes are to be taken out for 2019 and if subject to early withdrawal penalty. By what you said, it seems like you made excess contributions to your IRA account, hence the reason you were told to make the withdrawal and not close the account completely.

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