What happens if you contribute too much to your IRA in a year?
There is a limit to how much you can contribute to an IRA each year. If you contribute too much, then you have made an excess contribution. If you withdraw the excess by the time you file your tax return, you will not have to pay an early distribution tax on the excess. You must also withdraw the income earned on the excess while it was in the IRA, and that portion will be subject to an early distribution tax, unless it qualifies for another exception.
Please contact one of our IRA Experts at 800-472-0646 for more information.