Too much put into my 2006 Roth IRA contribution?

Question

In 2006 I made AGI over 95k but less than 115k thanks to an end of the year bonus. However I funded my Roth IRA at the full 4k amount earlier int he year. How do I resolve this?

According to the Roth IRA limits at 95k you start limiting down and if you make 115k you cannot put monies to a Roth IRA. The limit is raised if I was married.

Answer 1

Hello, darkrevni! Incidentally, the income limit pertaining to Roth IRA contributions from Single or Head of Household filers is $110k, not $115k. At any rate, you have three options regarding your excess 2006 Roth IRA contributions:

1) do nothing and pay a 6% excise fee on the excess
2) withdraw the excess before the due date of the return (April 17th this year), making it as if you had never contributed it
3) request that the excess be applied to 2007 (assuming that you have not already contributed your max for 2007)

Check out the IRS link under "Source(s)" for more details. Good luck! :-)

** Update **
The below answer is incorrect. First, that answer is regarding traditional IRAs; Roth IRA contributions are never deductible in any situation. Second, the yearly contribution limit for either type of IRA is currently $4,000. Some portions of contributions to a traditional IRA may indeed be non-deductible, bringing the more complex withdrawal that was noted. But $4,000 is still the maximum. The following link to the traditional IRA section of Publication 590 explains: http://www.irs.gov/publications/p590/ch01.html#d0e1464

Answer 2

in case you get your refund previous to april fifteenth, hells definite. in case you probably did no longer max out your roth final year than you need to max out 2006 first, then positioned any left in the 07 Roth. It concerns, no longer through tax outcomes yet through fact as quickly as handed up you will no longer be able to upload to the 06 account and which would be funds that under no circumstances gets a huge gamble to enhance and advance your retirement. each little bit counts. Rah Rah Rah. playstation Juleete is a moron. flow to IRS.GOV in case you desire to ascertain what I pronounced.

Answer 3

The deduction phase out does not limit the amount you are allowed to contribute. The full $4000 is still allowed as a contribution. The amount in excess of your allowable deduction is considered a non-deductible contribution. Such contributions make taxes on withdraws more complex. You don't need to FIX anything now.

Answer 4

I think that you can dep $4000 max regardless of income.
I did.

Did you send another $4000? If so, you got me. sorry