Should I file a 2015 Form 5392 or 2016 Form 5392?

[jibebuoy]

 I discovered I had excess 2015 contributions to my Roth IRA while preparing my 2016 taxes.  I intend to withdraw those excess contributions so I will not have a tax penalty for 2016.

[dmertz]

Was the excess contribution for 2015 made in 2015 or was it made in 2016?

[jibebuoy]

The excess was made in 2015.  I think I need to file a 2015 From 5392 along with a 1040X but I am unsure.  Thank you.

[dmertz · Accepted solution]

You have a 6% excess contribution penalty on both your 2015 and 2016 tax returns.  Since you did not already file a 2015 Form 5329, you must file it and pay the 6% penalty for 2015.  Although the IRS will often accept Form 5329 without a Form 1040X, if you previously filed a 2015 tax return, it would probably be best to file it with Form 1040X since it affects the amount of your tax liability that should have originally been reported on your 2015 tax return.

If the excess was not withdrawn before the end of 2016, you also owe a 6% penalty on this excess for 2016.  The penalty is due on the excess each year it remains in the account at year-end.  In this case, after clicking the Continue button on the Your 1099-R Entries page you would indicate to 2016 TurboTax that you made excess contributions in a prior year that were carried into 2016.  TurboTax will prepare 2016 Form 5329 to include with your 2016 tax return.

[dmertz]

Note that any amount of your excess from 2015 that you apply as a contribution for 2016 would not be an excess for 2016.  If you made a new eligible contribution for 2016 which blocks you from being able to apply more of your excess from 2015 as a contribution for 2016, you can request a return of some or all of your new 2016 contribution to make room to apply more of your 2015 excess as a contribution for 2016.

[jibebuoy]

Thank you.  I understand the process now and will work with my financial adviser to apply my 2015 excess  to 2016.

[RichardG]

As long as you withdraw the excess contribution before April 18, there is no need to file Form 5392.