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What if a Roth IRA contribution exceeds the annual contribution limit?

For example, you made a $6,000 Roth IRA contribution but only qualified to make a $5,000 contribution. The $1,000 excess would not be taxed and penalized because it wasn’t more than the annual contribution limit. ( All right, Dexter, you’re making my head hurt.) Thanks, Dexter All right – got all that? Didn’t think so.

What if I've contributed too much to my Roth IRA?

There are several possible remedies if you find that you've contributed too much to your Roth IRA. You must generally act before your tax-filing deadline for the year, including extensions, to avoid penalties. The penalty is a 6% tax on your excess contributions. 1. Withdraw Your Excess Contributions

Does a full Roth IRA contribution count as excessive?

So at least part of your contribution might count as excessive if you made a full Roth IRA contribution at the beginning of the year but didn't ultimately earn that much. The annual Roth IRA contribution limit for anyone under age 50 is $6,500 in 2023, increasing to $7,000 in 2024.

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