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post #1 of 4 (permalink) Old 02-26-2019, 05:46 PM Thread Starter
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Roth/traditional IRA question

Doing Turbo Tax and ran into a question. I have a SEP IRA and a Roth IRA and I contributed the max last year to both (doubled my max). Turbo Tax seems to think I contributed too much. My question is: is the max allowable for the total contributions of any and all IRA's or can you contribute the max to each?

Todd
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post #2 of 4 (permalink) Old 02-26-2019, 07:09 PM Thread Starter
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I found the answer. Unfortunately doubling the max is not allowed. Now I have to call my financial guy to pull some funds or I will be taxed each year until I do!
Dang.

Todd
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post #3 of 4 (permalink) Old 02-26-2019, 08:02 PM
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Quote:
Originally Posted by Squishman View Post
I found the answer. Unfortunately doubling the max is not allowed. Now I have to call my financial guy to pull some funds or I will be taxed each year until I do!
Dang.
Oops! And you'll likely have to amend some tax returns, too. When you get the 1099-R (iirc) from your investment broker there will be some earnings on the money which will be reportable as income. For some reason you won't get all the data until this time next year. So, for 2018 taxes you'll probably fill out the forms saying no excess contribution (if you pull it out before 4/15/2019), but you won't know if there was some gain (income) to claim yet. When you finally get that form you have to claim the income.

I'm going through the same thing one year down the road from you. I went over my limit in 2017 and pulled the money out. The brokerage figured out the earnings automatically, which is something I probably never could have calculated. This year I claim the small gains as income but have to file an amended 2017 return. Everything is in the big computer at the IRS, so you can't ignore it even though the net tax result may be $0.

Turbo Tax covers all the bases for you nicely. But why does it have to be so danged complicated with all these restrictions on how much you can save?

Last edited by Fly-Sig; 02-26-2019 at 08:04 PM.
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post #4 of 4 (permalink) Old 02-27-2019, 04:56 AM Thread Starter
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Originally Posted by Fly-Sig View Post
Oops! And you'll likely have to amend some tax returns, too. When you get the 1099-R (iirc) from your investment broker there will be some earnings on the money which will be reportable as income. For some reason you won't get all the data until this time next year. So, for 2018 taxes you'll probably fill out the forms saying no excess contribution (if you pull it out before 4/15/2019), but you won't know if there was some gain (income) to claim yet. When you finally get that form you have to claim the income.

I'm going through the same thing one year down the road from you. I went over my limit in 2017 and pulled the money out. The brokerage figured out the earnings automatically, which is something I probably never could have calculated. This year I claim the small gains as income but have to file an amended 2017 return. Everything is in the big computer at the IRS, so you can't ignore it even though the net tax result may be $0.

Turbo Tax covers all the bases for you nicely. But why does it have to be so danged complicated with all these restrictions on how much you can save?
Thx Fly for that info. Fortunately TT walks you through stuff fairly well, even if you don't understand everything. 10 years ago, I went to a professional for a couple years. When I sat down with him at his computer, he opened TT. I thought "heck, I can do that!".

Todd
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