I'm a high-income earner who completed a backdoor Roth IRA conversion in 2024, but TurboTax is incorrectly showing a penalty.
What I did:
- Contributed $7,000 to a traditional IRA (non-deductible)
- Promptly converted the full amount to my Roth IRA
- Properly reported both transactions on my taxes
Note: Our househhode income this year is above 240K
The problem: TurboTax is displaying this error message:
You Currently Have a Penalty
Because *You* made an excess contribution of $7,000 to *You*'s Roth IRA, "You" will owe a 6% penalty ($420) each year that excess money remains in the IRA.
But don't worry. You can remove this penalty by taking action before April 15, 2025 (or October 15, 2025, if you're filing an extension). What can I do?
Enter any contribution that you withdrew before April 15, 2025 (or October 15, 2025, if you're filing an extension).
Note: You must pay the penalty every year until the situation is fixed.
Contribution Withdrawn Before Due Date of Your Return
