Client made a 6K contribution to his traditional ira in 2019 and 6K to his Roth IRA in 2020. HIs high joint income disallows 100% of the contribution for each year.

Forum|Forum|5 years ago
April 1, 2021
2 replies
9 views

The client has not withdrawn his excess contributions. Should I amend 2019 - add excess IRA contribution to 5329? Should I report excess Roth contribution on 2020? or report both in 2020 since excess amounts not withdrawn?

ProConnect Tax

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Best answer by rbynaker

The 2019 IRA contribution would probably not be excess (unless there's no earned income), it would simply be non-deductible. I've reported these alone on Form 8606 and that the TP sign & mail it in by itself. Technically the IRS can assess a late penalty (I think it's $50) but I've never seen it actually happen.

The 2020 Roth IRA contribution can be corrected by 5/17/21 and you just pretend it never happened.

George4Tacks

Level 15

2019 and 2020 should contain the IRS 5329.

The excess should be withdrawn as quickly as possible, so that the 5329 is no required on the 2021 return.

Answers are easy. Questions are hard!

rbynakerAnswer

Level 13

The 2019 IRA contribution would probably not be excess (unless there's no earned income), it would simply be non-deductible. I've reported these alone on Form 8606 and that the TP sign & mail it in by itself. Technically the IRS can assess a late penalty (I think it's $50) but I've never seen it actually happen.

The 2020 Roth IRA contribution can be corrected by 5/17/21 and you just pretend it never happened.

D

dnplansAuthor

Level 2

Thank you so much! Genius response. I was overthinking. Debra

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