I suspected it was something like that, but I'm confused because it never happened before. I remember previously it was like, 6k made, 6k contributed to Roth, 6K allowed as the limit all ok. I think that happened for several years including last year. So how is it possible that it changed?
Also, the Earned Income credit shows as 499 when I enter income of 7k. So how they arrive at 6505 as the earned amount, resulting in excess contribution of 495?
Also, if 7k is the limit for a Roth contribution for 2024, when you made 7k exactly that year, how would anyone know to contribute 495 less before filing taxes?
If you already contributed 7k to your Roth, the investment was spread to a couple of stocks that lost significantly, do you have to sell the stocks at a loss to take the excess contribution out? Does it have to be the exact stocks you bought too?
What if you file taxes while requesting SALT, you don't bother with deductions, then would you get a surprise letter in the mail demanding you pay 6% penalty on the excess contribution within 30 days, or something?
I just spent like 4 hours on the phone with Turbotax to find a solution, but failed. So good answers would greatly be appreciated. We tested adding more income, with results solving the problem, by adding chump change. The problem is, even if I remember better to find out that I did indeed earn that chump change, it probably didn't leave a paper trail, plus I think I didn't report it when filing LA City business taxes, even though I'm sure reporting it with LA would've made 0 difference with LA. So would you include the chump change (not even 1k) on Turbotax to solve the problem?
P.S Does this mean I can't skip things in Turbotax, like the deductions section, even if I take SALT, because it can backfire, like how I almost missed this Roth issue?
What does level 15 mean? You're smart on this stuff?
Thanks.
