|
Posted by Buster on March 4, 2007, 8:50 pm
Please log in for more thread options
My wife has a SEP and she is the only participant. We have
estimated that we made a small excess contributuion to the
SEP in 2006 for 2006. My wife also has an IRA that we have
not been contributing to since we established the SEP.
I would like to have my financial institution correct the
excess contribution prior to April 17th by moving to excess
contributions to the IRA. I believe this corrects the issue
as an employer.
As an employee I believe we also have to withdraw the
earnings on the excess contributions. I understand I need
to report these earnings as income, or I can potentially
redirect to the IRA. But since my wife has the SEP and our
AGI exceeds the $85k deduction limit (the lower deduction
limt as my wife has a SEP), this amount will not be
deductible.
So my questions are:
1. If I just report the earnings as income, how eactly do I
do that? and
2. If I roll over the earnings to the IRA and it's not
deductible, what are the consequences? Does this then
become a Roth type contribution? Or do I just not take the
deduction on this piece? Does this amount need to stay
segregated in my IRA? Any penalties to pay or tax forms to
complete?
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. >>
<< ======================================================= >>
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap