I contributed an excess of 6400 to my SEP IRA for tax year 2020. Instead of filing an excess contribution form and paying taxes on it potentially, can I make an amendment to 2019 tax return to make the overage amount count towards 2019?
FYI, the contributions were made early last year in March and I can claim more SEP IRA contributions on my 2019 self employment income which includes the excess.
Just wondering if this is a common occurrence to make the amendent to prior years tax return and backdate the contribution. I have not found any instances of other people doing this?
Amended returns for SEP contributions are likely fairly rare due to typical contribution timing. In your case, the March, 2020 contribution would typically be made before the 2019 return was filed and therefore applied to 2019 if the 2019 contribution was not already maxed out. Then the 2019 return would be filed.
That makes sense, I originally intended to make my 2020 contribution to get ahead for the tax year. Since the pandemic hit my self employment income decreased significantly which cause the overcontribution. Thanks for clarifying. Yes the 2019 return was not maxed out and my 2020 contributions were made before I filed my 2019 taxes. I guess now since there is an overcontribution, I can still amend my 2019 return and put the excess towards 2019 instead of 2020. Therefore avoid the return of excess forms and paying capital gains/penalties.
Permalink Submitted by Alan - IRA critic on Mon, 2021-03-15 23:00
Yes, you can do this since you made your 2020 contribution by the due date for your 2019 return. If you made the 2020 contribution after the due date (plus any extensions), then you could not claim them on the 2019 return.