Traditional / Roth IRA Contributions - Tilted Forum Project Discussion Community

tornadored · 12-05-2006, 03:55 PM

Hello everyone,

In the spring of this year I opened both a Traditional and Roth IRA through E-Trade. I understand that both have a limit of $4000 for contributions. (I am under the age level for higher contributions, 22 years old actually.)

However, since I opened the accounts, I have contributed $3700 to my Traditional IRA and $1300 to the Roth.

Am I permitted to contribute more than $4000 per year to both accounts, or is it just permissible to contribute $4000 to one of them? If it is not permissible, what ramifications could result taxwise since I have exceeded the limit?

Thanks in advance.

Yakk · 12-06-2006, 01:36 PM

Some data:
http://www.irahelp.com/cgi-bin/forum...ames/read/3806
http://beginnersinvest.about.com/cs/...ntribution.htm
http://retireplan.about.com/od/rotha.../iravsroth.htm

It looks like the contribution is summed up over both.

I can't see it as possible to contribute 4000$ to both of them. There appears to be a 6% penalty for overcontribution amounts if you aren't fast enough in pulling it out. There are other penalties if you withdraw "earnings".

BadForm · 12-09-2006, 09:25 AM

If you did not make contributions in 2005 and if some of the contributions were made before April 15, 2006, you may be able to have some of the contributions switched from counting for 2006 ro 2005 (assuming you were eligible in 2005). That way you can avoid paying the penalty.

tornadored · 12-10-2006, 08:17 AM

Thanks for the insight. After a lengthy conversation with E-Trade the other night, they are able to refund my overage (which was about $990) dollars minus a $25 refund fee, and any taxes on earnings which I made.

Since I had not made any purchases with the contributions, the fund was all cash, and my earnings equated out to be about $0.10. Thus no tax, but a little bit of money for Christmas!

Actually, I will probably use part of it to pay off some Christmas bills, then recontribute it next month as a 2007 contribution.

BigBlueWrecking · 12-28-2006, 04:53 PM

Yeah, it would depend on when you put the money in, but for future reference you can put in 4000 total to a Roth or Traditional or combo of the two.

12-05-2006, 03:55 PM	#1 (permalink)
tornadored Tilted Location: OH-IO	Traditional / Roth IRA Contributions Hello everyone, In the spring of this year I opened both a Traditional and Roth IRA through E-Trade. I understand that both have a limit of $4000 for contributions. (I am under the age level for higher contributions, 22 years old actually.) However, since I opened the accounts, I have contributed $3700 to my Traditional IRA and $1300 to the Roth. Am I permitted to contribute more than $4000 per year to both accounts, or is it just permissible to contribute $4000 to one of them? If it is not permissible, what ramifications could result taxwise since I have exceeded the limit? Thanks in advance.

12-06-2006, 01:36 PM	#2 (permalink)
Yakk Wehret Den Anfängen! Location: Ontario, Canada	Some data: http://www.irahelp.com/cgi-bin/forum...ames/read/3806 http://beginnersinvest.about.com/cs/...ntribution.htm http://retireplan.about.com/od/rotha.../iravsroth.htm It looks like the contribution is summed up over both. I can't see it as possible to contribute 4000$ to both of them. There appears to be a 6% penalty for overcontribution amounts if you aren't fast enough in pulling it out. There are other penalties if you withdraw "earnings". __________________ Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

12-09-2006, 09:25 AM	#3 (permalink)
BadForm Crazy Location: In an office with no windows	If you did not make contributions in 2005 and if some of the contributions were made before April 15, 2006, you may be able to have some of the contributions switched from counting for 2006 ro 2005 (assuming you were eligible in 2005). That way you can avoid paying the penalty.

12-10-2006, 08:17 AM	#4 (permalink)
tornadored Tilted Location: OH-IO	Thanks for the insight. After a lengthy conversation with E-Trade the other night, they are able to refund my overage (which was about $990) dollars minus a $25 refund fee, and any taxes on earnings which I made. Since I had not made any purchases with the contributions, the fund was all cash, and my earnings equated out to be about $0.10. Thus no tax, but a little bit of money for Christmas! Actually, I will probably use part of it to pay off some Christmas bills, then recontribute it next month as a 2007 contribution.

12-28-2006, 04:53 PM	#5 (permalink)
BigBlueWrecking Psycho	Yeah, it would depend on when you put the money in, but for future reference you can put in 4000 total to a Roth or Traditional or combo of the two.