Traditional Individual Retirement Account Flashcards
1
Q
IRA
What are the IRA contribution limits for 2015 through 2018?
A
$5500 plus $1000 catch up provision those 50 and older.
2
Q
IRA
What are the IRA contribution limits for 2019 and 2020?
A
$6000 plus $1000 catch up provision those 50 and older.
3
Q
IRA
What is the penalty for excess contributions to an IRA?
A
- 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.
4
Q
IRA
How can you avoid excess contribution tax?
A
- 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.