For 2023, your total contributions to all your traditional and Roth IRAs cannot be more than:
- $6,500 ($7,500 if you are age 50 or older), or
- your taxable compensation for the year if your compensation was less than this dollar limit.
For 2019, 2020 and 2021, the limits are $6,000 or $7,000 is age 50 or older.
What if I contribute more than the maximum amount?
If you contributed more for the current tax year than is allowable or you had an amount on line 17 or line 24 of your prior year Form 5329, you may owe an additional tax for excess IRA contributions.
How do I report my excess contributions to a Traditional IRA?
Complete Part III of Form 5329 if those excess contributions were to a Traditional IRA. To complete this form and calculate your additional tax go to:
- Federal Section
- Other Taxes
- Additional Taxes on Qualified Plans and Other Accounts
- Complete Part III
Excess contributions from Line 16 of your prior year Form 5329: If you had excess contributions in the prior year, enter that amount.
Contribution credit: Enter the difference, if any, of your contribution limit for traditional and Roth IRAs less your contributions to traditional IRAs and Roth IRAs for the current tax year.
Current Year Traditional IRA Distribution included in income: Enter any withdrawals from your traditional IRAs that are included in your income. Do not include any withdrawn contributions reported in the next box.
Current Year Distributions of prior year excess contributions: Enter any amount of previous year’s excess IRA contributions that you had returned in the current tax year. See line 12 instructions for information regarding returning of 2022 excess contributions.
Excess contributions for Current Year: Enter the excess of your contributions to traditional IRAs for the current tax year (unless withdrawn) over your contribution limit for traditional IRAs.
How do I report my excess contributions to a ROTH IRA?
Complete Part III of Form 5329 if those excess contributions were to a Roth IRA. To complete this form and calculate your additional tax go to:
- Federal Section
- Other Taxes
- Additional Taxes on Qualified Plans and Other Accounts
Excess contributions from Line 24 of your prior year Form 5329: If you had excess contributions in the prior year, enter that amount.
Contribution credit: Enter the difference, if any, of your contribution limit for traditional and Roth IRAs less your contributions to traditional IRAs and Roth IRAs for the current tax year.
Current Year Distributions from your Roth IRAs: Generally, enter the amount from Form 8606, line 19, plus any qualified distributions. But if you withdrew the entire balance of all of your Roth IRAs, don’t enter less than the amount on last year’s Form 5329, line 24.
Excess contributions for current year: Enter the excess of your contributions to Roth IRAs for the current tax year (unless withdrawn by deadline) over your contribution limit for Roth IRAs.