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In 2011 my wife and I both maxed out our Roth IRA's and I just found out that we barely cracked the phase out level so I need to remove 80 bucks from each of our contributions. Does anyone know of a good way to do this? Ideally I would just like to roll it over to the 2012 allotment. Have any of you had to do this in the past?
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Speak to your brokerage firm about a "return of excess contribution"Originally posted by Goldy View Post
How To Correct Ineligible (Excess) IRA Contributions -
Yea, I think you're going to have to do a "return" like JPG metions... For the sake of tax records, I'm pretty sure the investment company needs to reflect having returned the excess 2011 contribution. You can then turn right around and re-invest it tagged as a 2012 contribution if you'd like. I had the same situation once a few years ago as well, and that's what I ended up having to do.Originally posted by jpg7n16 View PostComment
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The same thing happened to me last year. My brokerage firm handled everything for me. they had to reinvest the money as the next years contribution. No trouble at all.Originally posted by Goldy View PostBrianComment
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Fortunately for you it's not a lot of money, just a paperwork hassle. I just got hosed on my entire 5K contribution because, due to divorce, I had to change married filing separate status.
If you don't take out the excess contribution, there's a 6% excise tax. If you DO take it out, you're taxed on the earnings + a 10% penalty. The Roth is a good deal if you don't make too much money or file MFS- then there's the "gotchas"!Comment
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