In Dec 2019 I contributed to 2019 SEP. The contribution was $72 excess of the allowable amount, as calculated by TurboTax. It appears I have 2 options: (1) remove the excess. This will generate a 1099-R. Since the CORRECT SEP contribution amount will be on my tax return, it seems the 1099-R will result in taxing the $72 twice. It will be coded as "E" but when I put a mock 1099 in Turbotax with that code, it still generates taxes on the removal. I could override TurboTax to reflect the actual, higher SEP contribution made, but overriding voids Audit protection. Option (2) I can VCP (voluntary correction plan) with the IRS, and the IRS website states that "Alternatively, if a submission is made under the VCP program, the excess amount may be retained in the SEP-IRA, but only if the plan agrees to enter into a closing agreement and pay an additional amount to the IRS via an imposed sanction that is equal to at least 10% of the excess amount, excluding earnings. Note that the additional compliance fee will not apply if the excess amount is under $100. " So it looks like no fee since it's under $100. However the VCP forms look daunting. Any suggestions?
