Excess Roth IRA contribution
I recently contributed $6000 to my Roth ira in January 2022 as a 2021 Contribution. My CPA is now telling me that i had no earned income in that year and thus was not allowed to put that contribution in. So i went to my Financial Advisor and she did a $6000 overcontribution and pulled the funds out. In the mean time that original $6000 probably went down in value so wouldnt there be a loss there of some sort? There were a lot of transactions at that time so its really hard to know which $6000 chunk that was. Very confusing. Thanks. Your thoughts appreciated. Im 40 btw if that matters
Permalink Submitted by Alan - IRA critic on Mon, 2022-10-17 14:54
How much did you receive back? If it was 6000 exactly, then the corrective distribution was not done correctly and you still have a 2021 excess contribution in your Roth and will owe the 6% excise tax for 2021. If you received less than 6000 due to market losses, then the custodian probably used the correct IRS formula to calculate the loss. The 1099R you will receive next January will confirm this with the coding in Box 7. If you can check your Roth activity statement on line, the type of distribution is often described. If this was not done correctly, check back here for what still needs to be done.