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Excess contributions to my Roth IRA...

by Mary Jane
(Philadelphia, PA)

In Nov 2009, I invested $5,000 into my Roth IRA account. However, I didn’t work last year so I didn’t have any income. Did I make excess contributions? If so, what should I do to correct it?

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Excess contributions to my Roth IRA...

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starstarstarstarstar 		excess contribution
by: Paolo

Contributions that exceed the allowable limits may be refunded without penalty within a limited period of time—generally before the tax return for the year is required to be filed, including extensions. If the excess remains in the IRA beyond this grace period, it is subject to a 6% annual excise tax until withdrawn. The interest attributable to excess contributions may also avoid the 6% penalty if refunded before the tax filing due date. This interest is taxable, and, if the taxpayer is under age 59 1/2, is subject to the 10% penalty for premature distributions (unless an exception applies).

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