Thanks for all the helpful responses.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

las_cartas[at]yahoo.com wrote:

- quote -

IRS Pub 590 states (p.59): "If contributions to your Roth
IRA for a year were more than the limit, you can apply the
excess contribution in one year to a later year if the
contributions for that later year are less than the maximum
allowed for that year."

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

las_cartas[at]yahoo.com wrote:

- quote -

IRS Pub 590

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

las_cartas[at]yahoo.com wrote:

- quote -

The following is from page 59 of IRS Pub 590. Note the part
about applying excess contributions at the end.

What If You Contribute Too Much?
A 6% excise tax applies to any excess contribution to a
Roth IRA.

Excess contributions.
These are the contributions to your Roth IRAs for a year
that equal the total of:
1. Amounts contributed for the tax year to your Roth IRAs
(other than amounts properly and timely rolled over from a
Roth IRA or properly converted from a traditional IRA, as
described later) that are more than your contribution limit
for the year (explained earlier under How Much Can be
Contributed?), plus
2. Any excess contributions for the preceding year, reduced
by the total of:
a. Any distributions out of your Roth IRAs for the year,
plus
b. Your contribution limit for the year minus your
contributions to all your IRAs for the year.

Withdrawal of excess contributions.
For purposes of determining excess contributions, any
contribution that is withdrawn on or before the due date
(including extensions) for filing your tax return for the
year is treated as an amount not contributed. This treatment
only applies if any earnings on the contributions are also
withdrawn. The earnings are considered earned and received
in the year the excess contribution was made.

Applying excess contributions.
If contributions to your Roth IRA for a year were more than
the limit, you can apply the excess contribution in one year
to a later year if the contributions for that later year are
less than the maximum allowed for that year.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

las_cartas[at]yahoo.com wrote:

- quote -

While I know it can be dangerous to apply logic to tax laws,
it seems like you should be able to treat this as if you'd
withdrawn the excess and its earnings and simultaneously
contributed the same amount for this year.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

<las_cartas[at]yahoo.com> wrote:

- quote -

With patience and an inquisitive mind you can satisfy
yourself that this is possible (assuming that 2006 Roth
contributions of at least the amount of the 2005 excess will
be permitted), in Publication 590.

It's easier to look at Part IV of Form 5329, upping all tax
year references by one year to see how this will resolve on
the 2006 return.

Assuming that you decide to apply the excess to 2006, no
action with your custodian is necessary. Just reduce your
maximum 2006 contribution by the 2005 excess.

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

In 2005 I contributed a small amount more to my Roth IRA
than I am allowed based on my modified AGI. It seems I can
either withdraw or recharacterize the excess amount, but it
is possible to reallocate the excess amount to next year's
contribution (after paying the taxes on form 5329, of
course)? My tax software seems to hint this is possible but
does not give much detail. Which form or publication can I
refer to?

Thanks,

sr.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >