- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Get your taxes done using TurboTax
Yes, this situation can be a little tricky. To confirm your balance of the traditional IRA was $0 on December 31, 2022. If yes, then you should not get the 6% penalty calculated when you enter the nondeductible traditional IRA contribution and don't enter on the penalty screen that you withdrew the excess. "Excess contributions are taxed at 6% per year for each year the excess amounts remain in the IRA. The tax can't be more than 6% of the combined value of all your IRAs as of the end of the tax year." (IRS)
If you make the traditional IRA contribution nondeductible and don't tell TurboTax that you withdrew the excess on the penalty screen TurboTax will still create Form 8606. And if your balance in the traditional IRA is $0 you should have the penalty calculated as $0 on line 17 on Form 5329.
If this doesn't work you might have to use the TurboTax download version and override entries. Please be aware, returns that contain overrides cannot be e-filed and may not be covered under the 100% Accurate Calculation Guarantee. Please see How do I override (replace) an amount calculated by TurboTax? for additional information.
**Mark the post that answers your question by clicking on "Mark as Best Answer"