Excess IRA Contribution for 2024, Already Filed, Unsure How to Fix

RockRaider
RockRaider Member Posts: 3 Newcomer
in After you file

Recently, I reviewed my Roth IRA and Traditional IRA to make sure I maxed out everything for 2024 and 2025.

Since I was under the MAGI limit for 2024, I directly contributed $7000 to the Roth. For 2025, since I would be over the MAGI limit, I contributed $4000 into my tIRA and rolled it over, and then contributed $3000 into my tIRA, and rolled that over into my Roth as well. Seemingly no problem, eazy peazy.

The issue, though, is that when I checked my tIRA, it says Annual IRA Contributions:

  • 2025: $3000
  • 2024: $4000

I accidentally didn't check to make the $4000 a contribution for the 2025 tax year, and it defaulted to 2024! And of course, I have already filed my taxes through FreeTaxUSA and even gotten my refunds, because I didn't double-check until now (my bad, I know).

Thus, I am not sure how to go about removing the excess funds from the Roth, in addition to amending my tax return to show it was income (when I take the distrubtion to remove it) before the October deadline, that way I don't get penalized the 6% (I believe I will still take the 10% hit for the withdrawal).

Any guidance would be appreciated!

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Answers

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 602
    edited May 5

    Hi RockRaider,

    One option you can always do with the over contribution is to have it applied to 2025. Work closely with your IRA account manager to make sure this can be done, since the contribution and conversion (you said rollover, but I think you meant conversion), was done for 2024 not 2025. The trick is getting the conversion in 2025 with a form 8606.

    So you may need to just withdraw the $4,000 and start over.

    You may need to still pay a penalty for 2024 with an amendment since it is past the filing deadline, unless you have an extension filed.

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