I worked through the TurboTax questions for IRA contributions to calculate an IRA deduction. I recharacterized part of my wife's Roth IRA to a deductible traditional IRA to make my modified adjusted gross income below the 2018 married, joint, employer retirement plan, MAGI limit to prevent reducing our Roth IRA contribution limits. Before I finished the IRA contribution questions in TurboTax, it notified me that my Roth IRA has an excess contribution.
After completing the IRA contribution questions and triggering a federal tax review in TurboTax, it correctly reports my MAGI below the income level that causes a Roth IRA contribution limit. However, TurboTax still says that I must pay a penalty for contributing the full amount, $5500, to my Roth IRA.
Is there an additional limit to Roth IRA contributions other than MAGI? Is there a way to force TurboTax to re-assess the Roth IRA contribution limits after calculating my MAGI? Is there a way to manually correct the forms in TurboTax before I eFile so that I don't have to immediately file a 1040X showing that my MAGI is actually below the limit, allowing a full Roth IRA contribution without penalty?
Thank you for your inputs,
Jonathan
