IRA over contribute penalty

When I put in my simple IRA contribution info. I got a error message stating since I contributed more money into my simple IRA than I earned I was going to accrue a 6% penalty every year on the overage amount until withdraw the overage amount. I made more than the IRA contribute amount and I can't seem to find my error. Can you suggest an area to start looking? I went over my w2 info and it was all entered correctly.

Thank

Jason

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5 Replies

IRA over contribute penalty

Did you also enter it as a IRA contribution under Deductions? Only enter it from the W2, nowhere else.

IRA over contribute penalty

would that be the amount I entered into box 12A?

IRA over contribute penalty

Also is a simple IRA different from a traditional IRA

IRA over contribute penalty

Yes it's different. Found this post...

A SIMPLE IRA is an employer-sponsored retirement plan offered within small businesses that have 100 or fewer employees. SIMPLE is an acronym for savings incentive match for employees.

So It's not a traditional IRA and you can't take a deduction for it. It already came out of your paychecks pretax and has already been deducted from the wages in box 1 and you can't deduct it again.