Guest BSR Posted July 25, 2001 Posted July 25, 2001 What is the IRS rationale for only allowing Roth contributions if you file your federal tax return jointly when you are married (versus married filing separately)? My husband and I each made a contribution for the year 2000 but now must take them out because we filed married filing separately. Is the penalty only a 6% excess tax penalty ($4,000 x 6% = $240) or do we have to pay a 10% penalty on top of that? If yes, is that 10% on the $4,000 or on the income earned on that $4,000 thus far?
BPickerCPA Posted July 26, 2001 Posted July 26, 2001 The rule is set out by Congress, not the IRS. Whether there is a rationale for it is not relevant, that's the rule. The penalty is 6% of the amount not timely withdrawn. The 10% penalty is on the earnings, not the amount put it. Barry Picker, CPA/PFS, CFP New York, NY www.BPickerCPA.com
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