Incorrectly contributed to IRA

Forum|Forum|4 years ago
October 14, 2021
1 reply
4 views

This is a followup question. In May when I cursorily filed my extension for 2020 taxes, turbotax determines I was eligibly for Self employment taxes as it incorrectly interpreted the rents received reported in box 1 of 1099 to be self employment income. In reality it should get reported with other schedule E rental income (a separate question posted for that). I was able to contribute 6,000 to a traditional IRA, which I did prior to the May 15th deadline.

But now, after this correction and prior to the October 15th tax extension date I realize that contribution to be invalid. How can I recover/reverse this action without penalty? I had opened a new IRA account with ETrade and had contributed the $6,000 into it.

Any help will be greatly appreciated!

TurboTax Home & Biz Windows

Mike9241

Level 15

contact the custodian to remove the excess. if removed by 10/15/2021 there is no 6% penalty for excess contribution. income earned on it must be included on your 2020 return and is subject to a 10% penalty if you are under 59 1/2

Mike9241

cdibuffAuthor

Level 2

Thank you for your reply l. Do just to be clear since the snount held in the IRA wax 6000 and wax never invested and still us 6000 I would not be subjected to the 10% penalty? Right?