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Question

Non-deductible contribution to IRA

Forum|Forum|1 year ago
March 3, 2025
1 reply
0 views

I know that there will be a penalty of 6% if I exceed the my yearly allowance of traditional IRA, (which I think is $7000 for age 50 and under and $8000 for age of over $50 for year 2024). Wondering this 6% penalty is applicable for 2024 tax year or penalty would be yearly? If yearly for how long?

Also, would like to know if there is a way or retirement account type (e.g. Roth IRA or "Backdoor IRA") that I can exceed my yearly contribution allowance limit and not get penalized for over payment?

-Regards

No, there is no retirement account that you can exceed yearly contribution limit and not get penalized.

The penalty applies each year until you remove the excess contribution from your account.

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