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Excess IRA Contribution Excise Tax Calculator6 Percent a Year (IRC 4973)

What does this come to under the current IRS rules?

The 6 percent yearly tax on excess contributions, capped at the account value, and the total over the years the excess stays.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Excise tax for one year
$180
6 percent of the excess at year end
Excise tax over the years entered
$360
Assumes the same excess and value each year
Annual rate
6.00%
Drawn to one scale
Excise tax for one year$180
Excise tax over the years entered$360
All results
MeasureResult
Excise tax for one year$180
Excise tax over the years entered
Assumes the same excess and value each year
$360
Annual rate6.00%
How this was worked out
Work shownrecomputed as you type
Tax per year = 6% x excess contributions at the close of the year
The tax cannot exceed 6% of the account value

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Tax per year = 6% x excess contributions at the close of the year
  • The tax cannot exceed 6% of the account value

How it works

Section 4973 imposes a 6 percent excise tax each year on excess contributions to an IRA, Roth IRA and certain other tax-favored accounts, measured at the close of the taxable year. The tax cannot exceed 6 percent of the account value.

The tax repeats every year the excess remains. For a traditional IRA the excess is the amount contributed above the amount allowable as a deduction. For a Roth IRA it is measured against the amount allowed under section 408A. Corrective withdrawals and their treatment are not modeled.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Does the tax repeat?

Yes. It applies for each taxable year the excess contribution remains in the account.

How do I compute my excess?

For a Roth IRA, use the amount above the contribution allowed under section 408A. This tool takes the excess as an input.

Which accounts are covered?

IRAs, Roth IRAs and the other accounts named in section 4973(a). This tool applies the 6 percent rule only.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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