I am a federal employee and contribute to the Thrift Savings Plan (TSP). My contributions are into a traditional IRA. For 2022, the IRS maximum contribution to regular TSP is $20,500. For those 55 and older the catch-up annual contributions limit is an additional $6,500.
I am having an issue with TurboTax. On my W-2 box 12, I have DD $5527.08 and D $20,188.00. When this populated to Retirement and Investments section and I answered the questions, it appears as though I have over paid into an IRA by $13,188. It penalized me (amount unknown) and tells me I need to withdraw the excess funds and if I do not, then I will be penalized every year until this is done.
My questions is why TurboTax is not recognizing that federal employees TSP is a little different from a regular IRA. I am sure my taxes are not correct for a couple of past years and I am not sure how to fix this or if I can. What do I need to do in order for TurboTax to know I can contribute the amount I have and not get me return deducted?
