Say I make over 194k and can contribute 0.


I know my brokerage Roth IRA account will be happy to take my money. How is this enforced at distribution time?

  • Your broker wouldn't know that you're over the cutoff. So, it's not their job to catch this. Commented May 18, 2016 at 19:19

2 Answers 2


It is enforced long before distribution time.

By May 31st of each year the trustee sends a copy of IRS form 5498 to you, they also send a copy to the IRS. This form tells the IRS that you made an IRA or Roth IRA contribution.

The IRS will then match it to your tax form that you filed in April. If you shouldn't have made the contribution, or you over contributed, they will discover the issue.

They will also catch people that have multiple IRAs who hope the IRS doesn't notice they exceeded the annual contribution.

as was noted in the comments: if you don't correct the issue in a timely manner the penalties will continue until the correction is made.

  • and send you a bill for the taxes, plus the extra penalty taxes. And they repeat this each year, until you remove the money.
    – Aganju
    Commented May 17, 2016 at 23:02
  • 6%/year excise tax, isn't it?
    – littleadv
    Commented May 18, 2016 at 5:00

If you've made an excess contribution that you do not withdraw by the tax deadline, you are supposed to self-report a penalty when you file your tax return, on Form 5329, the result of which goes on Form 1040, line 59, which increases your tax due.

If you didn't self-report it on your tax return, then you completed your tax return incorrectly and paid too little tax, with all the usual consequences of paying too little tax (when discovered, having to pay back taxes and penalty, etc.).

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