IRA contribution to wrong account – how to fix?
Husband and wife each have an IRA at fund company and write a $12,000 check for 2009 contributions.
Since the husband already contributed $6,000 to his other IRA at another custodian, he shouldn’t have received a contribution into his IRA at the fund company.
This was an administrative error. The clinets have made IRA contributions every year since 1999 and it was their intention to fund their IRAs – which they did.
We are removing the excess contribution from the husband’s IRA and want to deposit to the wife’s IRA for 2009. We need the fund company to correct Form 5498 showing a 2009 contribution for the wife. Fund company is saying too much time has passed, but we responed to this as soon as IRA alerted us to the issue.
How do we get the fund company to see the clients intent and correct the Form 5498 to show a 2009 contribution for the wife? What is the IRS’s ruling on this?
Any help is much appreciated!
Permalink Submitted by Jose Morales on Tue, 2012-04-10 15:33
The fund company should not have accepted any contribution from your clients without something in writing clearly designating who the contribution was for and what tax year it should be credited. This is usually done by completing a contribution instructions form, but it can also be as simple as a note on the check. If the written designation clearly states that the contribution was to be for the wife and for tax year 2009, then the fund company should promply correct their error. If there are no written instructions making it clear who the contribution was for and what tax year it should be credited, then you will be at the mercy of the fund company. The clients intent should never be left to interpretation, and that is for the benefit of both the IRA Custodian and the client.