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Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2336
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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I have an IRA that the bank messed up and reclassified as a

Customer Question

I have an IRA that the bank messed up and reclassified as a Roth. I noted that in 2015 and requested them that they switch it to traditional, to continue applying for the tax credit. They did comply but now I have a form showing that I took a distribution. This was a bank error of classification but now I have to pay taxes on it and even was taxed about $1,000 on it. This year I am being charged taxes on that distribution even though it was an error. Is there anything that can be done to adjust that amount since its been sitting in a type of IRA all of the time?
Submitted: 6 months ago.
Category: Tax
Expert:  ShawnA replied 6 months ago.
Absolutely. There are several options from small claims court to an IRS letter you write.
Expert:  Anne replied 6 months ago.
HiI'm Anne. I've been preparing taxes for 28 years and I'll be happy to help you. You need to go back to the bank, have them correct their information (and your 1099R) and here's why:Roth IRA's are AFTER tax, so you can always get your own money back that you invested. Please see below: It doesn't make sense for you to take after tax money and invest it in a Traditional IRA which is a before tax money and have to pay on the distribution from the Roth. This would cause you to pay 2x on the same money. Take the information to the bank with you and see if it helps. If you have found my answer helpful, please take the moment to rate positive by clicking on the stars.It is ONLY through positive ratings that we are compensated for our time and knowledge Thank you for choosing justanswer.

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