"gindie" <gindie[at]hotmail.com> wrote:

- quote -

Correct

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Yes

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A 1099-R

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

My wife was the sole person in her business. Her work ended
in March. Not realizing that her final payment was
substantially less than usual, I, as her SIMPLE IRA
administrator, mistakenly deposited the "normal" amount for
her March SIMPLE deposit. Therefore, the 2006 deposits in
the SIMPLE exceeded her total income from the work for the
year. (She essentially was socking away close to 100% of
her income).

I only discovered this recently. I understand that I have
made excess contributions. Fidelity told us to send them a
letter and they will back-out the excess contributions and
associated earnings. My questions:

1) I understand that there are no tax consequences on the
amount of the excess itself, correct?
2) Is it correct that we owe ordinary income tax plus the
10% penalty on the earnings related to the excess?
3) What IRS statement should I expect from Fidelity that
describe all of these transactions?

Thanks.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >