Wrong Contribution Year for Roth IRA

[jimbohoward69]

I was doing some auditing of my investments recently and realized that a Roth IRA contribution I made this year was for the wrong tax year. Filing deadline for 2020 was May 17 of this year, so, I submitted a contribution (with catch-up) on 4/26/21. However, I mistakenly chose "2021" instead "2020".

The Vanguard rep told me that I was SOL since I didn't change the tax year distinction before the filing deadline. But I wonder, why does that matter? Can't they just go in and change the contribution year (since I submitted before the IRS deadline)?

If not, I'm wondering if there's another avenue, i.e...have the contribution refunded back to me and re-submit (if that's even possible). It kills me I missed out on $7,000 contribution and want to exhaust all options before calling it a day. Any feedback/experiences you may have would be greatly appreciated!

 

[SecondCor521]

I agree with the Vanguard rep that you are stuck, especially now that we are after the 2020 tax filing deadline even with extensions (which is October 15th).

You could have asked for a distribution of excess contribution and would have received the original contribution plus any attributable earnings. But that deadline has already passed - I think at the latest it would have been 10/15/2021.

You could have just made the 2020 contribution (leaving the 4/26/21 contribution in there as your 2021 contribution) separately. But again, that deadline is passed.

My only suggestion would be to try to let go of the regret, and learn from it to be more careful next time. And perhaps watch key tax deadlines and do things ahead of time. And don't be too hard on yourself - I am careful and watch tax deadlines and tax plan fairly extensively and carefully, and I made a multi-thousand dollar error of my own that I just discovered this summer. It's rough, but in the big picture I and my kids will still have enough money, and I was able to learn from my mistake and hopefully not make it again this year and next (it has to do with my kids' college funding).

 

[jimbohoward69]

My only suggestion would be to try to let go of the regret, and learn from it to be more careful next time. And perhaps watch key tax deadlines and do things ahead of time. And don't be too hard on yourself - I am careful and watch tax deadlines and tax plan fairly extensively and carefully, and I made a multi-thousand dollar error of my own that I just discovered this summer. It's rough, but in the big picture I and my kids will still have enough money, and I was able to learn from my mistake and hopefully not make it again this year and next (it has to do with my kids' college funding).

Thank you so much for reply! You're right...I just need to chalk this one up as a missed opportunity but learn from it. I too am extremely diligent about my investments & taxes but we all make mistakes from time to time. Much appreciated