what if contributed too much to SEP in amended return

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Subject Author Date what if contributed too much to SEP in amended return removeps-groups@yahoo.com 10-14-2009  Re: what if contributed too much to SEP in amended... bill-deja 10-14-2009  Re: what if contributed too much to SEP in amended... removeps-groups@yahoo.com 10-15-2009
Posted by removeps-groups@yahoo.com on October 14, 2009, 2:14 pm Please log in for more thread options Suppose you do you 2007 tax return and find that you can contribute 10k into your SEP. Then you amend your return and take more business deductions, so your maximum SEP contribution is 9k. It looks like you save on federal taxes, like $250 if in the 25% tax bracket, but you have to take 1k out of your SEP IRA and pay $350 tax on it (25% tax plus 10% penalty), and maybe even tax on the earnings of the 1k. -- << ------------------------------------------------------- >> << 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 (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by bill-deja on October 14, 2009, 5:04 pm Please log in for more thread options On Oct 14, 11:14 am, "removeps-gro...@yahoo.com" <removeps- gro...@yahoo.com> wrote: > Suppose you do you 2007 tax return and find that you can contribute > 10k into your SEP.  Then you amend your return and take more business > deductions, so your maximum SEP contribution is 9k.  It looks like you > save on federal taxes, like $250 if in the 25% tax bracket, but you > have to take 1k out of your SEP IRA and pay $350 tax on it (25% tax > plus 10% penalty), and maybe even tax on the earnings of the 1k. > > -- Would it be possible to recharacterize some of the contribution as a 2008 contribution? -- << ------------------------------------------------------- >> << 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 (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by removeps-groups@yahoo.com on October 15, 2009, 8:14 pm Please log in for more thread options On Oct 14, 2:04 pm, bill-d...@weacca.com wrote: > On Oct 14, 11:14 am, "removeps-gro...@yahoo.com" <removeps- > > > Suppose you do you 2007 tax return and find that you can contribute > > 10k into your SEP. Then you amend your return and take more business > > deductions, so your maximum SEP contribution is 9k. It looks like you > > save on federal taxes, like $250 if in the 25% tax bracket, but you > > have to take 1k out of your SEP IRA and pay $350 tax on it (25% tax > > plus 10% penalty), and maybe even tax on the earnings of the 1k. > > Would it be possible to recharacterize some of the contribution as a > 2008 contribution? This seems possible per section 404(a)(1)(E). (E) Carryover Any amount paid in a taxable year in excess of the amount deductible in such year under the foregoing limitations shall be deductible in the succeeding taxable years in order of time to the extent of the difference between the amount paid and deductible in each such succeeding year and the maximum amount deductible for such year under the foregoing limitations. So what forms does one use to reflect this carryover? And suppose you to withdraw the excess amount (and pay the 10% penalty), then on which form/line do you report the excess amount, and I guess the penalty is on form 5329. -- << ------------------------------------------------------- >> << 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 (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Re: CT Amended Return June 3, 2006, 10:03 am 706 Amended Return May 28, 2008, 4:14 pm Filing amended return ? ? ? April 3, 2007, 2:07 am Amended 1065 return April 5, 2007, 1:49 am Amending an amended return June 13, 2006, 10:34 am Amended return required? March 10, 2009, 7:49 pm When should I file an amended return? May 1, 2009, 3:34 pm Amended Tax Return, Missing Forms February 18, 2008, 8:37 pm State refund due to amended return March 8, 2009, 8:59 pm Corrected 1099 and Amended Return Question March 18, 2008, 8:50 pm