over contribution of IRA

echo · Post by **echo** » Fri Apr 17, 2015 3:30 pm

Hello I just realized I made over contribution to IRA by $10. The account was just funded on Apr 14. Called the bank and was told to do a distribution form. I was hoping to just change the contribution form and reduce the contribution by $10.

Other than filing 1040x, what else do I need to do for this over contribution? Do I need to fill out any extra form?

Thanks!

nelsona · Post by **nelsona** » Fri Apr 17, 2015 4:01 pm

www.irs.gov
Not a cross border issue.

nelsona · Post by **nelsona** » Fri Apr 17, 2015 4:05 pm

Your bank should not have let you do this. Most online brokerages put the limits automatically.

You could ask them to make the 10$ a contibution towards your 2015 IRA limit, which the bank should have doen automatically.

Get a new IRA manager.

echo · Post by **echo** » Fri Apr 17, 2015 4:06 pm

[quote="nelsona"]www.irs.gov
Not a cross border issue.[/quote]

Only cross border issues can be discussed here?

echo · Post by **echo** » Fri Apr 17, 2015 4:44 pm

[quote="nelsona"]Your bank should not have let you do this. Most online brokerages put the limits automatically.

You could ask them to make the 10$ a contibution towards your 2015 IRA limit, which the bank should have doen automatically.

Get a new IRA manager.[/quote]

My bank can not do this for me because I am covered by an employment pension plan. So I have to calculate my own contribution limit. It's just a high interest IRA CD.

If I carry over this to 2015, don't I need to fill out form 5329? Form 5329 is supposed to be filed by Apr 15 if i have over contribution. I already missed the deadline because I just realized today there is over contribution (one 1099 interest slip was sent to the old address and forwarded to me just now after I filed my return 3 days ago. The extra $50 interest I would have to amend my return for is reducing my IRA limit by $10).

So i have two choices:
1. Do not withdraw the $10 over contribution. Carry it over to next year. 6% penalty is nothing considering its only $10 excess contribution. File amend return only for the unreported interest. File 5329 for this $10 although it's after Apr 15.
2. Withdraw the $10. Amend my return to add the extra interest income, and reduce my IRA deduction by $10. Do I also need to file form 5329 in this case?

Thanks!

echo · Post by **echo** » Tue Apr 21, 2015 12:16 am

Can somebody help? If i carry over $10 to next year's contribution, should I fill out form 5329 or even form 8606?

Thanks!

nelsona · Post by **nelsona** » Tue Apr 21, 2015 6:09 am

Eh, echo, yes this is a cross-border forum. There are 100's of IRS tax question forums that can help you.