Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next
Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124795  
Subject: Re: Combining Education IRA and State Savings Pl Date: 6/12/2000 4:45 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
wsterry writes:

I understand I can't do it without a penalty, but the only penalty I seem to be able to find is this 6% excise tax on the excess contribution to the IRA.

The documentation for the state college savings plan (NY) indicates that if you do both, then you pay the 6% on the Ed IRA.

I reply:

That 6% excise tax is assessed every year until the excess contributions are removed. In addition, my guess is that when the IRS eventually catches up with the excess contributions, it'll be able to deem all of them unauthorized and force you to withdraw them, with the usual penalties.

As for the state documentation, I'll have to defer to one of the people who knows what he/she's talking about. --Bob
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.