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In early April, I contributed $3000 to my Roth IRA account and marked the contribution for the year 2003. I didn't realize it at the time, but unfortunately, I had already contributed $3000 in April 2003 for year 2003. It was an honest mistake.

I received notice of my excess contribution from the IRA company and they asked me how do I want to do to resolve the problem. My initial reaction was lets make it a year 2004 contribution. However, they indicated that I would have to pay a tax of 6% ($180) to correct the mistake no matter what I did. Are they correct? Is there any IRS rules that allow time to correct such mistakes? It is still less that two months from when the mistake was made.

Yes, there is. You have up until the due date of your return, including extensions to make the correction. Unless you filed for an extension, your time has passed and your excess contribution is subject to the penalty.


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