This is a follow-up question to I may have made an ineligible contribution to a Roth IRA. What should I do?
In 2017, prior to Tax Day, I made a TY 2016 contribution to my IRA that exceeded my 2016 income. I also made a TY 2017 contribution to my IRA that exceeded my 2017 income. I am in the process of recharacterizing my contributions with my IRA custodian which makes me liable for the following taxes:
- Capital gains on earnings taken out of IRA
- 6% penalty tax on excess TY 2016 contribution
I am uncertain about the following:
- Can I pay all these taxes on my TY 2017 taxes or will I have to amend my TY 2016 taxes as well?
- Can I apply my standard deduction against the capital gains taxes and/or the 6% penalty tax?