The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: ERRONEOUS CONTRIBUTION TO 1999 TRADITIONAL IRA||Date: 9/6/2000 4:09 AM|
|Author: stockmover||Number: 39603 of 121150|
For the 1999 tax year I elected a filing status of married-filing separately for both me and my wife. Based on our individual incomes and deductions this filing status provided us a larger refund then filing married-jointly as we have done in the past. The larger refund was confirmed by using my What-If Worksheet within my Intuit Turbo Tax software. Unfortunately, what I overlooked (as well as my TURBO TAX SOFTWARE to my dismay) was that my $2000 IRA contribution [which was made in Feruary 1999] is not allowed due to my income being over $10,000. Fortunately I did not make an IRA contribution for my wife. I have not yet been audited by the IRS , but I am sure it's probably just a matter of time.
I have reviewed this message board for possible answers and have come to the conclusion that I will probably have to file an amended return [1040X] for my 1999 tax year. However, the trustee of my IRA is a discount brokerage firm and therefore I will probably have to provide them with some kind of form to withdraw my contribution plus any accumulated earnings on the $2000 (which is probably another can of worms) Based on my research, I don't qualify for a Roth IRA and even if I could somehow transfer the $2000 contribution to a Traditional Non-Deductible IRA, that still would not reduce my tax liability for 1999.
My question is? ...is there any other options available to me which I may have overlooked which would reduce or eliminate my additional tax liability which I roughly calculated to be a little less than $1000.00 ?
If I amend my return to a filing status of married-filing jointly my additional tax liability will be about $1400 even with the then eligible Traditional IRA! Any advice from TMFTaxes, TMF ExRO or any Knowledgeable FOOL would greatly be appreciated.
Although I accept responsibility for this error, I am really kind of PO'd that my TURBO TAX software did not at least RED-FLAG this error during it's "Final Review" of my tax forms for any errors or omissions. I have used Turbo Tax software for a couple of years now and until now, I have been very satisfied with its overall performance.
Thank You for your help.
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