Are you sure that her 2022 excess was absorbed in 2023?My wife recently received a letter from our brokerage firm stating they incorrectly handled her contribution and made an extra deposit in 2022 causing her to exceed the IRA contribution limit. They provided compensation but stated we would need to file to correct the error.
Now we need to file a 5329 for 2022 to pay the penalty for the excess and for 2023 to absorb the excess contribution.
My question is outside of the 6% penalty how do we determine any additional fees (failure to file, interest, etc.) we may need to pay when we submit the forms? Also, can we claim any waiver given it was the brokerage who made the error and told me two years later?
Many thanks for the help
If she otherwise contributed the max for 2023, there would be no room to absorb the 2022 excess. That would create a 2023 excess from carryover of the 2022 excess. But if enough of the 2023 contribution was removed with gain/loss by 10/15/2024 if need be, that would create the space needed to absorb the 2022 excess in 2023.
Either way, a 2023 5329 will be needed to either show the absorption to eliminate the 2022 excess, or to pay another 6% excise tax because the 2022 excess had not been absorbed. The issue would then carryover to 2024.
Statistics: Posted by Alan S. — Mon Aug 26, 2024 6:19 pm
