IRA contribution dates conflict.

[noelm]

Hello folks,

A question about how IRA contribution year is calculated.

DW opened a new IRA account sometimes in 2014. She made her first contribution of $3500 on 4/17/2015. We filed taxes on 4/18/2015 for the year 2014. So essentially this contribution was for year 2014.
This year, she contributed $3000 on 3/11/16 and we filed taxes on 3/16/2016. This contribution was for year 2015.
We have mentioned both of these contributions in IRS filing.

Today, she gets an email from the broker website that she has contributed $6500 for year 2015, which is higher than the limit of 2015, $5500.

I wonder, if their statement is correct. If yes, how does one address this. If no, do I just give them the info above and it will be sorted out? I have never faced this thing before and quite confused.

Many thanks in advance.

[SteveNU]

When I've done this in the past with Vanguard they ask what year the contribution is for when you make it.

Sent from my Nexus 6P using Early Retirement Forum mobile app

[RE2Boys]

You need to talk to your IRA custodian and insure that the contributions are recorded for the proper year. From Jan 1 to due date of your tax return (nominally April 15) you can make contributions for both the current calendar year or for the previous tax year. My Vanguard forms ask for which year you are contributing for and the confirmation also specifies the year the contribution is for.

Unless you specify, there is no guarantee that your April 2015 funding was credited as a 2014 contribution, and it is wrong to make such an assumption. Again, talk with your IRA custodian.

If you did not specify, I've no idea what your IRA custodian's default is. But it would be better to not accidentally contribute too much in a given year.

[Boss2014]

I think the 2014 IRA contribution deadline was April 15, 2015 for both Roth and traditional IRAs. It’s also the same day taxes are due.

You should definitely contact whomever holds you IRA to discuss ASAP. Remember, that amount was reported to the IRS.

[Which Roger]

Quote:

Originally Posted by Boss2014 I think the 2014 IRA contribution deadline was April 15, 2015 for both Roth and traditional IRAs. It’s also the same day taxes are due. You should definitely contact whomever holds you IRA to discuss ASAP. Remember, that amount was reported to the IRS.

That was my first thought - 4/15/15 was the deadline for making 2014 IRA contribution, but your contribution was made 2 days later, so it could only be for 2015.

[Alan]

Quote:

Originally Posted by SteveNU When I've done this in the past with Vanguard they ask what year the contribution is for when you make it. Sent from my Nexus 6P using Early Retirement Forum mobile app

+1

[RunningBum]

Quote:

Originally Posted by noelm DW opened a new IRA account sometimes in 2014. She made her first contribution of $3500 on 4/17/2015. We filed taxes on 4/18/2015 for the year 2014. So essentially this contribution was for year 2014.

You either declared this contribution for 2014 or you didn't. There's no "essentially" about it.

You probably weren't given the option of 2014 or 2015 because there was no option. You missed the 2014 date by two days, so this contribution had to be for 2015. Just because you filed your taxes 3 days late does not extend the IRA contribution date.

Here's what Vanguard has to say, at https://investor.vanguard.com/ira/excess-contribution

Quote:

If you discover it after you've filed your tax return You can either: Remove the excess within 6 months and file an amended return by October 15. Reduce next year's contributions by the amount of the excess. For example, if your limit is $5,500 and you exceed it by $1,500 in the current year, you can offset the excess by limiting your contributions to $4,000 the following year. Be aware that when you "carry forward" an excess to a future year, you'll have to pay a 6% penalty until the excess is absorbed or corrected.

I'd go with the first option to avoid the 6% penalty.