Reminder: Excess IRA Contribution Correction Due Before October 15, 2013
September 10, 2013
Reminder: Excess IRA Contribution Correction Due Before October 15, 2013.
October 15 is fast approaching—and with it, the last opportunity for most IRA owners to correct any 2012 IRA excess contributions and avoid the penalty tax. Generally, an excess contribution is the any amount contributed to your Traditional or Roth IRAs for the year greater than either:
• $5,000 ($6,000 if you are age 50 or older), OR
• Your taxable compensation for the year, whichever is less.
For a Traditional IRA, the taxable compensation limit applies whether your contributions are deductible or non-deductible. Also, any contributions made the years you reach age 70½ and later are also considered excess contributions. An excess contribution could also be the result of your own, your spouse's, and/or your employer's contribution(s), and/or an improper rollover.
An IRA owner who files his federal income tax return on time has an automatic six-month extension from the due date of the tax return, excluding extensions (generally, until October 15) to withdraw the excess contribution plus any net income attributable to it (NIA). To avoid paying and additional 6% penalty tax to the IRS, IRA owners must withdraw excess contributions with NIA by their federal income tax return due dates plus extensions the year in which a contribution is made. If you feel you may have an excess contribution contact your competent tax professional. If your IRA is on deposit with AmeriCU, please contact us soon as possible at 1.800.388.2000 if you need assistance in correcting you’re an excess IRA contribution before the deadline. We are here to help you!