topic IRA - contribution to IRA did not pass before tax deadline 2020 in Retirement tax questions

IRA - contribution to IRA did not pass before tax deadline 2020

moffanny — Mon, 03 Aug 2020 14:21:50 GMT

Hi,

On July 14th, I created a IRA account and thought I transferred the maximum amount. On July 15th, I sent my tax declaration. Unfortunately, Fidelity was unable to transfer the amount on time to the IRA, so there is a mistake in my tax declaration. My contribution to IRA for 2019 was finally 0$.

How can I correct the mistake?

Thank you

Re: IRA - contribution to IRA did not pass before tax deadline 2020

Critter-3 — Mon, 03 Aug 2020 15:06:22 GMT

Amend the return to remove the contribution ... however do not amend it until the IRS processes the original return and you have the original refund in hand.

Re: IRA - contribution to IRA did not pass before tax deadline 2020

moffanny — Mon, 03 Aug 2020 18:39:02 GMT

Thank you. I already received the refunds (state and federal).

What is the penalty that I will face? Should I modify my return as soon as possible? Should I made all those modifications within TurboTax? Any tips to do so?

Re: IRA - contribution to IRA did not pass before tax deadline 2020

macuser_22 — Mon, 03 Aug 2020 19:33:13 GMT

You did not say if this was a Traditional IRA that you received a tax deduction for of a Roth IRA that does not actually go on a tax return but might add to the "savers credit" if you qualify for that. If a Roth and no savers credit then you do not need to do anything. If Traditional then you must amend.

Amended returns can only be mailed. It is suggested that it be mailed certified with return receipt (or other tracking service) to verify that the IRS receives it.

See this TurboTax FAQ for detailed amend instructions:
https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed

-- Amended returns can only be mailed - allow 8-12 weeks - can take up to 16 weeks (4 months) for processing.

You can check the status of the amended return here, but allow 3 weeks after mailing.

https://www.irs.gov/filing/wheres-my-amended-return

Re: IRA - contribution to IRA did not pass before tax deadline 2020

moffanny — Mon, 03 Aug 2020 19:41:15 GMT

I was referring to a traditional IRA, sorry for the lack of precision.

Is there any financial penalty for amending when you end up paying more taxes? Do I need to send a check along with the tax declaration?

Thank you very much!

Re: IRA - contribution to IRA did not pass before tax deadline 2020

macuser_22 — Mon, 03 Aug 2020 20:13:41 GMT

@moffanny wrote:

Is there any financial penalty for amending when you end up paying more taxes? Do I need to send a check along with the tax declaration?

Yes there is. Tax due was on July 15. After that the IRS charges interest on tax due ending when they receive your payment sent with the amended return or electronically paid on their website. The IRS will send a separate bill for the interest after they process the amended return that can take 16 weeks to process.

The sooner you amend and pay, the sooner the interest stops.