17

No one at fidelity told you to save more. Some poorly coded notification system suggested you save a higher percentage of your income with no consideration that your current election is taking you within spitting distance of the maximum. It's probably important to remember that the custodian is just a vendor of the company you work for. You're entering a ...


11

No, your accountant is completely incorrect. They have no relation to each other. Traditional IRAs and Roth IRAs share the same contribution limit, but this has nothing to do with 401(k)s. Traditional 401(k)s and Roth 401(k)s share a separate contribution limit, but this has nothing to do with IRAs. The only thing that can limit your Roth IRA contribution in ...


11

What you should do is called "re-characterization". See the instructions for form 8606 for details (that is also the form to use to report the incident). See example 3: You made a contribution to a Roth IRA and later recharacterized part or all of it to a traditional IRA. Report the nondeductible traditional IRA portion, if any, on Form 8606, Part I. ...


8

This is a common occurrence when somebody has multiple jobs in one year. The employer can't know if you have reached the annual limit. They know to stop when you have hit the maximum for their company, but don't have information on the other jobs. In fact the IRS doesn't let them factor in the other jobs. They have to keep making their payment until you hit ...


8

TL-DR: Remove one of the contributions (and all earnings therefrom) for 2017 by December 31, 2017. Don't wait till after the New Year to tell the IRA custodian to count it as a 2018 contribution. You have double-contributed to IRAs for 2017, and so, by December 31, 2017, you should withdraw one of the contributions as well as the gains (if any) that the ...


7

The first employer matching contribution gets taken back. You don't want to mess around with over contributions like this. In addition to withdrawing over contributions, they withdraw some portion of investment gains. The accounting gets complicated so best to avoid the issue.


7

You didn't mention how old you are, which may be a factor, but as you observe you are already contributing the maximum you can to a 401(k) (or at least close to it). Most retirement systems have some sort of "retirement calculator" that look at your current savings rate, time to retirement, other retirement assets, and cost of living to determine if you are ...


6

Congratulations on getting married! As far as the IRS is concerned, you are a married couple for all of this year for tax purposes. The 2014 HSA contribution limit for you and your husband together is $6550. This limit applies to both of you together, whether you file jointly or separately. So it looks like you and your husband have excess contributions ...


6

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 ...


6

Anyone can sue for any reason, so technically yes they can sue. The only thing that they might run up against is a statute of limitations, but that would be state dependent and you did not specify the state. Additionally, I would think that 2 years is within most statute of limitations. I am no lawyer, and as such this is not legal advice. This is what I ...


5

You can correct it before April 15th (Tax day) without penalty. You'll need to withdraw the portion that is over contributed and a portion of the earnings according to a formula. Your last contribution is the extra contribution, so you'll need to make the withdrawal from the IRA annuity.


4

Yes, you'll be able to get the money by submitting legitimate receipts for care for your child, and at tax time you'll pay the tax on the extra $3600.


4

This is a question that you want to make sure with a tax expert. It appears based on the IRS documents that you can do so. The question is will the confusing set of documents slow the IRS computers and delay your refund. If you recontribute to a new account, I would even select a new custodian, within the 60 day window this should not be a big deal. If ...


4

Since your comment on @JoeTaxpayer's answer says that you are still under the 2012 contribution limits if the extra money is left in your 401k account, I do not think that there is any problem for you if the money is left in the 401k account. As I understand it, your salary is $X for 2012 of which you contribute some percentage per paycheck to your 401k ...


4

Your best bet is to remove the excess contribution. Your broker should have forms to do that. There is a 6% tax on the excess contributions for each year that it remains uncorrected. It would be better to just eat the $25 fee and get rid of any future headaches.


4

I found a forum post on the Intuit website that confirmed what I learned here and in some other places. Thanks all for the feedback and input. The gist of it is: Yes, the earnings on the withdrawn amount count towards MAGI, further reducing your contribution limit You could repeatedly withdraw (given enough time before you file taxes) until it settles, or ...


3

You can't change the W2, the employer issues it and sends it to the IRS. You cannot affect it in any way. The employer reported correctly. You did contribute $4137 in 2015. You then withdrew the excess in 2016, and did it timely, so it is not taxable in 2016. However, the excess contribution should be added back to your wages on your tax return. The way to ...


3

You should speak to HMRC about the correct way to unpick this. The ISA helpline number is 0300 200 3312.


3

You didn't have a situation of "excess contribution". If you have proof that someone in Fidelity actually told you what you said, you might try to recover some of your losses through a lawsuit. However, their first (and main) defense would be that they're not in the business of providing tax advice, and it is your problem that you asked random person a tax ...


3

One of the ways to fix it is to do nothing, and pay 6% penalty on the excess. That would cost you $90, and you'll report the excess of 2013 as a contribution in 2014 and will learn not to make such mistakes again. Another way is to talk to your IRA custodian and see what they can do about it. The most trivial thing is to physically withdraw and then re-...


3

What you should do is re-characterize contributions from being a Traditional IRA contributions to Roth IRA contributions. Call your broker that holds the account and ask how to do that. Note: re-characterize means you don't move the money to Roth account, you retroactively say that it was a Roth account to begin with. By re-characterization you're saying ...


3

First of all, make sure that the money that you got from the POD (pay on death?) account is actually taxable income to you. If you get a gift, you do not have to pay income tax on the money. If you get a bequest, which is typically what payments from a POD account usually are, that is not taxable income to you. Now, there may be gift tax due in the one case ...


3

If you end up contributing too much to your 401(k)s due to having more than one employer, you could end up with double taxation, once on the excess contribution in the year you contributed and once on the withdrawal of the excess in the year you corrected the excess contribution. To prevent this, you need to take a corrective distribution by April 15 of the ...


3

"Since the new employer doesn't know how much I may have contributed," The employer does know. If you start your job in the middle of the year, the employer will not let you contributing to the 401K plan they sponsor, unless you disclose how much you've already contributed to other 401K's that year.


3

Yes, you can withdraw the excess contribution (or actually any amount you contributed for 2015, not necessarily an excess), plus earnings from that withdrawn contribution, by April 15, and not incur a penalty for the excess contribution. It would count as if you did not contribute that amount at all. The earnings would be taxed as regular income, and the ...


3

Calling this "strange" is an understatement. I'd call it illegal. You can't pay healthcare premiums with HSA funds while you are employed (unless you are on COBRA), and if you over contribute you pay a 6% tax on the overage unless you correct it. Furthermore, overage contributed by an employer must be treated as taxable wages, so they'd be better off just ...


3

I did this myself a few years ago. Best path forward is to call your financial institution managing your Roth and let them know (Vanguard helped me sort out my over-contribution). You'll need to tell them the amount you are allowed to contribute (or conversely the amount of your contribution overage). Generally they will need to run a calculation and ...


2

"The penalty for excess contributions is 6 percent. The 6 percent is assessed on the amount of the overage. This penalty is an excise tax. If you remove the excess amount prior to the end of the tax year, you will not be assessed a penalty on the excess contribution amount." Above is from http://beginnersinvest.about.com/od/401k/a/401k-Penalties-To-Avoid....


2

First, if your stock is trading at $1 and you transfer the 5000 shares in-kind to your TFSA on August 2, 2011, you are deemed to have disbursed that stock in your (assumed) non-registered account. This may have tax consequences depending on the ACB of the original purchase. As for your TFSA overcontribution, you will only have to pay the 1% monthly penalty ...


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