IRA excess contribution

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Topic Author
njuser
Posts: 203
Joined: Thu May 15, 2008 11:10 am

IRA excess contribution

Post by njuser » Wed Mar 20, 2019 10:33 am

Requested return of a traditional IRA excess contribution from Vanguard. Saw the pending transaction as removing the *entire* 2018 contribution. Called Vanguard and had that corrected (not happy...)

However, I now see that while the correct excess was taken out, it shows a separate transaction for a small amount of 'attributable earnings' which I would understand if this fund had made any money, but it hasn't. I have a net overall loss showing in my cost basis for contributions since 2016. Even if they base it only on the 2018 total contribution, there should still be a net loss. Any ideas where these earning are coming from? (for the record the amount is in the 10s so very small)

Can't call right now or I would.

Topic Author
njuser
Posts: 203
Joined: Thu May 15, 2008 11:10 am

Re: IRA excess contribution

Post by njuser » Wed Mar 20, 2019 10:54 am

I guess the periodic dividend/capital gains distributions (reinvested to shares) are considered?

FederalFIRE
Posts: 216
Joined: Thu Jan 17, 2019 11:40 am

Re: IRA excess contribution

Post by FederalFIRE » Wed Mar 20, 2019 10:57 am

I had an over-contribution for 2018 so I called and asked them to remove it. A week later I went to check and make sure it was complete only to find that they actually removed a 2019 contribution, so now I'm still over the limit for 2018 and have had an amount removed from 2019 that I didn't want removed. :oops:

Topic Author
njuser
Posts: 203
Joined: Thu May 15, 2008 11:10 am

Re: IRA excess contribution

Post by njuser » Wed Mar 20, 2019 11:01 am

FederalFIRE wrote:
Wed Mar 20, 2019 10:57 am
I had an over-contribution for 2018 so I called and asked them to remove it. A week later I went to check and make sure it was complete only to find that they actually removed a 2019 contribution, so now I'm still over the limit for 2018 and have had an amount removed from 2019 that I didn't want removed. :oops:
I guess I would call them again...

I rarely make changes like this but from previous (bad) experience I knew to check and I'm glad I did.

They should have your written request on file where they ask you the tax year of the contribution in question. Make them fix it. (you say you called but is that possible? I was given the option of a docusign or printed out form that I could mail in) If you had gains from your 2019 contribution you will owe income tax plus 10% penalty for early withdrawal so worthwhile to have it fixed.

FederalFIRE
Posts: 216
Joined: Thu Jan 17, 2019 11:40 am

Re: IRA excess contribution

Post by FederalFIRE » Wed Mar 20, 2019 11:07 am

njuser wrote:
Wed Mar 20, 2019 11:01 am
FederalFIRE wrote:
Wed Mar 20, 2019 10:57 am
I had an over-contribution for 2018 so I called and asked them to remove it. A week later I went to check and make sure it was complete only to find that they actually removed a 2019 contribution, so now I'm still over the limit for 2018 and have had an amount removed from 2019 that I didn't want removed. :oops:
I guess I would call them again...

I rarely make changes like this but from previous (bad) experience I knew to check and I'm glad I did.

They should have your written request on file where they ask you the tax year of the contribution in question. Make them fix it. (you say you called but is that possible? I was given the option of a docusign or printed out form that I could mail in) If you had gains from your 2019 contribution you will owe income tax plus 10% penalty for early withdrawal so worthwhile to have it fixed.
Yes... this is my afternoon project. I'm betting that this is really just a function of their website since the distribution actually occurred in 2019. Hopefully their bookkeeping is clean on the back end and I'm just seeing the results of their somewhat rudimentary online platform.

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Lancelot
Posts: 247
Joined: Thu Jul 05, 2007 9:09 pm
Location: Philippines

Re: IRA excess contribution

Post by Lancelot » Wed Mar 20, 2019 5:48 pm

njuser wrote:
Wed Mar 20, 2019 10:33 am
Requested return of a traditional IRA excess contribution from Vanguard. Saw the pending transaction as removing the *entire* 2018 contribution. Called Vanguard and had that corrected (not happy...)

However, I now see that while the correct excess was taken out, it shows a separate transaction for a small amount of 'attributable earnings' which I would understand if this fund had made any money, but it hasn't. I have a net overall loss showing in my cost basis for contributions since 2016. Even if they base it only on the 2018 total contribution, there should still be a net loss. Any ideas where these earning are coming from? (for the record the amount is in the 10s so very small)
I had an excess contribution, made in error. I wanted to buy Emerging markets from my IRA settlement fund but mistakenly clicked my taxable settlement fund. I called Vanguard and completed an online form and the money was returned in six days. However, during that brief time, I had a small gain on the Emerging Market purchase, which was treated as a taxable distribution. The excess contribution was non taxable.
No Where for Very Long...

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