What happens if I contribute too much to my IRA or Roth IRA in 2022?

Explanation of the options to address an excess 2022 contribution to an IRA or Roth IRA IRS summary of Modified Adjusted Gross Income limits for deducting 2022 traditional IRA contributions and making 2022 Roth IRA contributions - To listen to the retirement planning Education podcast, join the retirement planning Education Facebook group or download lots of free retirement planning Education material - #IRA #RothIRA #Investing DISCLAIMER: This video is only helpful hints and education. It is not specific tax, legal or investment advice. Before considering acting on anything you see in this video, first consult with your tax, legal or investment advisor. While the information expressed in this video is believed to be accurate, neither Andy Panko, CFP®, RICP®, EA nor Andy Panko EMC LLC make any representations to its accuracy....(read more)

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If you contribute too much to your IRA or Roth IRA in 2022, you may be subject to a 6% excise tax on the excess amount. The tax applies for each year the excess contribution remains in the account. The IRS considers any contribution above the annual contribution limit of $6,000 for an IRA or $7,000 for a Roth IRA in 2022 to be an excess contribution. The 6% tax applies to the amount of the excess contribution, not the total contribution. For example, if you contribute $7,500 to your Roth IRA in 2022, the excess contribution is $500 and the tax would be $30. If you discover the excess contribution before the filing deadline for your tax return, you can withdraw the excess amount and avoid the tax. However, if you do not withdraw the excess contribution by the filing deadline, you must pay the tax. In addition to the 6% excise tax, you may also owe income taxes on the amount of the excess contribution. If the excess contribution is made to a traditional IRA, the amount is considered taxable income. If the excess contribution is made to a Roth IRA, the earnings on the excess amount are subject to income tax. To avoid the 6% excise tax and any potential income taxes, it is important to keep track of your contributions to your IRA or Roth IRA and make sure you do not exceed the annual contribution limit. If you do contribute too much, be sure to withdraw the excess amount before the filing deadline to avoid the tax. https://inflationprotection.org/what-happens-if-i-contribute-too-much-to-my-ira-or-roth-ira-in-2022/?feed_id=70736&_unique_id=63ec6c3189044 #Inflation #Retirement #GoldIRA #Wealth #Investing #Excesscontribution #investing #ira #retirementplanning #RothIRA #TraditionalIRA #Excesscontribution #investing #ira #retirementplanning #RothIRA