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Financial Planning / Tax Strategies


Subject:  Re: Should I Convert? Date:  6/21/2011  6:00 PM
Author:  Bob78164 Number:  113559 of 127637

edyboom223 writes (in part):

To correct an excess contribution, an individual must remove the excess amount and any applicable income from the IRA by the owner's tax-filing deadline, which is generally April 15. But if you miss the April 15 deadline, you may still be able to make the correction, as individuals who file tax returns by April 15 receive an automatic six-month extension on the deadline for removing the excess amount. An excess contribution that is not removed by the deadline accrues a 6% penalty for every year it remains in the IRA.

I reply:

Can the problem be fixed by amending the prior year returns to forego use of the foreign earned income exclusion? Based on a $30,000 per year income, I'm not even sure there'd be any tax liability. --Bob
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