2

I accidentally over contributed $25 to my traditional IRA last year giving a total non-deductible contribution of $5025. This was then converted along with all my traditional IRAs into Roth IRAs in 2010.

Now shall I recharacterize $25 from Roth to Traditional IRA and then do removal of excess distribution of $25 from my traditional IRA? Is this worth all the hassle? Will the IRS care about such a paltry sum? What are the penalties and fines for just leaving it be? The complication to taxes hardly seems worth the effort of this inadvertent error.

1
  • Oh they care. It is their job to care.
    – MrChrister
    Feb 2, 2011 at 4:32

1 Answer 1

3

There is a penalty for the excess deposit, 6% per year until it's removed. I agree, it seems small, but send in the form, take care of it, and put it behind you. Easy enough.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .