What happens if I overcontribute to my IRA?

Don't worry! We're happy to help correct any overcontributions for you. There are two methods available to correct your excess contribution:

Removal the Excess Method (Recommended if corrected before tax filing deadline)
We can remove excess contribution and the associated earnings from your IRA. This will be penalty free since the removal will occur before tax filing deadline. Once the funds are removed, you can recontribute them as a current tax year contribution if you have the room. The removal can be withdrawn to your bank account or moved from your IRA to a Wealthsimple personal account.

Carry Forward Method (Recommended if corrected after the tax filing deadline)
You can leave the funds in your IRA and then claim them as a carry forward contribution for 2018. To do this, you would report them as a contribution when you file your 2018 taxes. With this method, you would have to pay a 6% penalty for the time your funds were in the IRA during 2017. You would file IRS form 5329 to report and pay the penalty owed on your excess contribution.