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I accidentally contributed to traditional IRA in addition to…

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Second opinion] I accidentally...

Second opinion] I accidentally contributed to traditional IRA in addition to maxing out 401k. The amount that I contributed to traditional IRA was taxed. What can I do fix this so I don't get taxed when I withdraw money from the traditional IRA when the time comes? Or what else can I do fix it? Thanks.

Submitted: 4 months ago.Category: Tax
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Customer reply replied 4 months ago
This happened during 2016 tax year.
Answered in 1 hour by:
4/13/2018
Tax Professional: Lev, Tax Advisor replied 4 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,360
Experience: Taxes, Immigration, Labor Relations
Verified

You are eligible to contribute into 401k plan AND to traditional IRA - there is no violation.

However - you might not able to deduct that contribution to the IRA.

In this case - you will need to include form 8606 with your 2016 tax return and inform the IRS that is nondeductible contribution.

If you did not do so - you may amend your 2016 tax return and add that form.

Your tax liability will not be affected.

That nondeductible IRA contribution will be your basis.

When later you will take distribution from the IRA - that nondeductible amount will be distributed tax free.

Let me know if you need any help with reporting.

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Tax Professional: Lev, Tax Advisor replied 4 months ago

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If you still have any doubts, need clarification - please be sure to ask.

I am here to help you with all Social Security / Tax related issues.

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