Excess IRA contributions

Forum|Forum|6 years ago
March 15, 2020
3 replies
42 views

Hello,

My client had and excess IRA contribution in 2018 in the amount of $4,000. The excess was the result of him being older than 70 1/2

In 2018, the 6% tax was assessed in the amount of $240.

In 2019, the excess contribution remained. He did not withdraw it. The tax in 2019 is calculated at $480. It is showing the 2018 contribution and a 2019 contribution of $4,000 even though he did not make a contribution in 2019.

What should the tax be in 2019? I'm thinking $240, but ProSeries is showing $480

Any thoughts?

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Best answer by linette

I think you are right at $240.

Unless there was additional excess contributions in 2019.

Start with the penalty amount of $480 and try to follow it backwards. It sounds like somewhere there is an addtional $4,000 entered in the wrong place.

Also review the IRA contribution worksheet. Sometimes I can find links there or entries there that by following will take me to the source.

Another place to look is the carryforward information.

This is a tough one if it is really resulting from computer carryforward as it may not be somewhere in the system that we are familiar with entering.

L