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New Member
posted Mar 19, 2025 9:41:58 AM

Do I have to pay the penalty for excess contribution only for this year since I am filing married but separate if I will be divorced from my husband soon?

I made Roth contributions for 2024, I am wondering if the penalty will apply next year if I will be single and the threshold is much higher.

0 2 2165
2 Replies
Expert Alumni
Mar 19, 2025 9:52:11 AM

If you made an excess contribution and do not withdraw it then you will have to pay the 6% penalty each year as long as you have the excess in the Roth account. Please see What if I made an excess Roth IRA contribution.

 

Your Roth IRA contribution may be limited based on your filing status and income. For 2025 the income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $150,000 and $165,000 for singles and heads of household, up from between $146,000 and $161,000 (IRS).

 

Level 15
Mar 19, 2025 9:58:57 AM

Each year is judged on its own facts.  If you contributed an excess this year, based on your 2024 filing situation, you can either pay the penalty, remove the excess, or recharacterize it as a non-deductible contribution to a traditional IRA.  Each has pros and cons.

 

If you remain eligible to contribute to a Roth in 2025, you can "use up" the excess by applying it to your 2025 limit.  For example, suppose you contributed $3000 in 2024 and it is all excess this year.  And suppose in 2025 you will be eligible for the full $7000.  If you leave the $3000 in the Roth and pay the penalty this year, then the $3000 will be considered as part of your 2025 limit, and you can contribute up to $4000 more, and that will eliminate the penalty in the future.