Traditional Individual Retirement Account

Question 1

IRA

What are the IRA contribution limits for 2015 through 2018?

Answer 1

$5500 plus $1000 catch up provision those 50 and older.

Question 2

IRA

What are the IRA contribution limits for 2019 and 2020?

Answer 2

$6000 plus $1000 catch up provision those 50 and older.

Question 3

IRA

What is the penalty for excess contributions to an IRA?

Answer 3

• Excess contributions are taxed at 6% per year as long as the excess amounts remain in the IRA.
• The tax can’t be more than 6% of the combined value of all your IRAs as of the end of the tax year.

Question 4

IRA

How can you avoid excess contribution tax?

Answer 4

• To avoid the excess contributions tax:
  
  • withdraw the excess contributions from your IRA by the due date of your individual income tax return and withdraw any income earned on the excess contribution.