Filing a Return of Excess from IRA

Forum|Forum|10 months ago
October 9, 2025
10 replies
223 views

Please forgive my naiveté when I tell you what happened..

I opened up an IRA account maybe 20 years ago (in my early 20's) and contributed to it here and there. I started working for my current employer back in 2011 and started paying into my employer's retirement account, while still contributing towards the IRA (some years only $2500, some years $5000, it varied year to year).

I only found out in 2023 that it's illegal to contribute to both retirement accounts, at which point I stopped contributing to the IRA.

My income has always been too high to ever claim a deduction from contributing to the IRA.

I was recently made aware of the Return of Excess form for contributions made beyond the federal limit.

My questions are...

*Is there a statute of limitations on needing to file a Return of Excess form? Because I made additional contributions starting in 2011 (again, never took a deduction), is a form required for a tax year that was 14 years ago?

*Because I never took a deduction from any of the IRA contributions I made, does anything need to be done at all?

*There are some years that my retirement contributions didn't fully meet the federal limit, in that case is my IRA contribution okay, so long as the total between the two contributions didn't go over the federal limit?

Please help me figure this out. I will try and answer any questions you have if further clarification is needed. How bad did I mess this up?

Thank you,

lchan

Not A Product Question

Opus 17

Level 15

It is not illegal to contribute to an IRA if you also participate in a qualified workplace retirement plan. You might not be eligible for a tax deduction, but you can still contribute. You just have to make certain adjustments for the nondeductible amounts.

A "return of excess" is a special procedure that can only be done up to October 15 of the year after the ineligible contributions. If your last potentially ineligible contribution was in 2023, it is too late to even think about the "return of excess" procedure as a way to fix this.

Are you sure you were never eligible for the deduction? In 2011, the deduction phase-out started at $56,000 for single and $90,000 for married filing jointly. Did you make more than that, even 14 years ago?

The 2023 deduction phase-out started at $73,000 for single and $116,00 for married filing jointly.

Are you sure that you have been over the deduction limits ever since 2011?

Let's start by clarifying that, then we can see what we think next.

lchanAuthor

Level 3

@Opus 17 That is correct, for all years we had an income greater than what was eligible to claim the deduction.

We file Married Filing Jointly.

I did some more digging and realized that for several years the total contribution made between my employer's retirement account and the IRA was less than the federal limit for that year.

But between years 2016 and 2022, the total contribution between the two was higher than the limit for each year. The amount over varies year to year, but they are all over the limit.

Opus 17

Level 15

@lchan wrote:

@Opus 17 That is correct, for all years we had an income greater than what was eligible to claim the deduction.

We file Married Filing Jointly.

I did some more digging and realized that for several years the total contribution made between my employer's retirement account and the IRA was less than the federal limit for that year.

But between years 2016 and 2022, the total contribution between the two was higher than the limit for each year. The amount over varies year to year, but they are all over the limit.

I think you are still confused about the contribution limits. You are always allowed to contribute up to the maximum to a traditional IRA ($5000, $6000, or $7000 for the years we are talking about.), even if you contribute to a workplace plan. The limits do not combine.

For example, in 2025, the total limit for contributions to a workplace plan like a 401(k) is $23,500 for the employee salary deferral, and $70,000 from employer plus employee. Even if you and your employer max out the 401k, you can still contribute up to $7000 to a traditional IRA.

The problem is that you took tax deductions that were not allowed. The contributions themselves are fine.

However, if you used software for any of these years, the software should have prevented you from taking a tax deduction based on your income. Do you know if you actually took the tax deduction for all years 2011-2023? If you made the contribution but did not take the deduction, you would have a form 8606 with your tax return. If your last IRA contribution was in 2023, does your 2023 tax return include a form 8606?