Roth IRA contributions error I have lived overseas since 2001, and because of that status, claimed the foreign income exemption status on my annual tax returns. All the while I was making contributions to my Roth IRA, and my wife's Spousal IRA. I was recently told that those contributions are not allowed, since because of claiming the foreign income exemption I had no taxable income during those years. Now I am trying to straighten our the problem. I have called the mutual fund companies where the IRA accounts are located (not the original companies, since I moved the IRA's from Schwab to other investment funds), and was told that they could not help me so I would need to talk with my tax preparer. I have no idea what I need to do or where to begin fixing this problem. I assume I will have to remove all those contributions that I have made over the past 12 years from those IRA funds, and pay a 6% tax on the contrubutions for each year the money remained in the funds (is all this correct?). I am also wondering if I need to remove any income earned by those funds, and if so, would that be just for the year the money was invested, or all subsequent years as well? Since the funds have been moved to numerous funds over the years, I have no idea or records of what the earnings were each year. Can anyone please give me a step-by-step plan for how to fix this situation? |