Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.
02-28-2018 10:57 AM - edited 02-28-2018 10:59 AM
In April 2017, I rolled my Roth IRA from Wells Fargo to Betterment. I continued to make contributions to the Roth IRA throughout 2017. In January 2018, I received a letter from Wells Fargo with a summary of contributions and changes to the Roth IRA in 2017. That summary shows that I contributed the maximum of $5,500 to the Roth IRA in January 2017 (but it did not specify whether such contribution was against tax year 2017 or tax year 2016). So, I thought that all other contributions I made in 2017 through Betterment were in excess of the $5,500. As such, I removed the excess and calculated the net gain, using the IRS formula. However, I later found a more detailed letter from Wells Fargo showing that the $5,500 I contributed in Jan 2017 was against the 2016 tax year and not 2017. So, I did not really exceeded the $5,500 limit for 2017.
In short, I removed the contributions from my Roth IRA for tax year 2017 that were not in excess. How do I file/report this to the IRS for 2017? Do I continue to report it as an excess contribution even though it was not an excess? Or do I report it as an early withdrawal and pay the penalization fees? Please help!
03-06-2018 03:49 PM
Welcome to H&R Community.
Unfortunately, you would not be able to report this as an excess contribution since the initial amount was for 2016. You would have to treat this as an early withdrawal with a penalty. I wish I had more positive news, but the rules on IRAs are quite rigid.