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|Subject: Re: HELP! Excess Contributions||Date: 2/25/2002 9:56 AM|
|Author: TMFPixy||Number: 33876 of 75776|
Greetings, OLF, and welcome. You asked:
I saw the earlier post by WiseNLucky, but I didn't see any mention of applying the excess contributions to the next year's contributions. I found this on the IRS Pub 590:
Applying excess contributions.
If contributions to your Roth IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year.
Does anyone have any information on how exactly to do this? I've just discovered that I over-contributed for 2001, and would like to move the contributions to 2002. I'd also like to know if I'm still subject to the 6% penalty if I move the contributions to this year.
It's simple. In an earlier post, you said the excess contribution you made was to a Roth. In that case, just leave the excess in the Roth. Pay the 6% penalty due in 2001 for the excess contribution made in that year. For 2002, call the excess for 2001 a regular Roth contribution for 2002. Then make sure if you add more money to the IRA, that those extra contributions PLUS the excess remaining in the IRA do not exceed your allowable contribution limit for 2002. The cost to you is the 6% penalty for the prior year.
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