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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Re: Rollover IRA Date: 11/12/2013 9:43 PM
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I suspect the confusion here is that you didn't realize that a rollover is not a deductible contribution to your traditional IRA. The IRS generally refers to all deposits to your IRA as "contributions". A direct contribution is money you contribute that you may/may not deduct on your form 1040. A "rollover" contribution is just another way of saying that you transferred a retirement plan account balance from your employer's retirement plan to your TIRA. This will not count as a deductible contribution, as these dollars are already pretax. The other difference between these two forms of "contributions" is that rollovers do not require that you have earned income and you can do this at any age, while direct contributions do require that you (or your spouse) have earned income of at least the direct contribution amount, but with a TIRA you can only directly contribute up until the year you reach age 70.5.

So, assuming this is for 2012, look at your form 1040, line 32. Do you show an amount here? If so and this represents the dollar amount of the rollover, you did it wrong and you'll have to file an amended return to correct it or, if the IRS corrected it for you, pay the back tax they've calculated, which I'm sure will also include a penalty.

BruceM
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