Message Font: Serif | Sans-Serif
No. of Recommendations: 0
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.

Print the post  


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.
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.
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.