Guest Jim Brennan Posted February 26, 1999 Posted February 26, 1999 Self employed person deferred $6000 in '98 but now doesn't have $6,000 of earned income. Is there any way to return the excess? How is it reproted on the 1099R?
Gary Lesser Posted March 2, 1999 Posted March 2, 1999 Remove the excess (after taking the employer's contribution into ac****) on or before the due date of the individual's Form 1040 along with any gain thereon. So, if the S-E earned, say $4,000 is to be matched 100% up to 3%: $4,000 x .9235 = $3,694 (IRS called for reduction under IRC 1402) $3,694 / 1.03 = $3,586.41 (elective amount) $3,586.41 x 3% = 100%/3% match of $107.59. $107.59 + $3,586.41 = $3,694.00. The SIMPLE-IRA trustee will Code the 1099-R to reflect that only the gain (from first prior year) is taxable for such year. The return of the nondeductible excess contributions is not taxable when distributed. [iRC 4972(d)((1)(A)((iv)]
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