DanaB27
Expert Alumni

Get your taxes done using TurboTax

Yes, it seems that the excess contribution got carried over. But you do not have an excess contribution since you removed it before the 2020 due date. Please follow these steps to delete the wrong excess contribution entry:

 

  1. Click on "Search" on the top right and type “IRA contributions”
  2. Click on “Jump to IRA contributions"
  3. Select “Roth IRA
  4. On the "Enter Excess Contributions" screen delete the excess contribution from prior years.
  5. Repeat for your wife

 

You might want to check if you have the excess contribution penalty on your 2020 return (Form 5329 part IV. If you do have the 6% penalty, then follow these steps to remove it:

 

  1. Click on "Search" on the top right and type “IRA contributions” 
  2. Click on “Jump to IRA contributions"
  3. Select “Roth IRA
  4. Continue until you get to the penalty screen and enter the contribution amount $6,000 as removed by the due date.

 

Please be aware, if you are under 59 ½ then you will have to pay the 10% early withdrawal penalty on the earnings on your 2020 tax return (calculated on Form 5329 part I. If you are over 59 ½ in 2020 then please follow these steps when you enter your 2021 Form 1099-R codes PJ on your 2020 tax return:

 

  1. Click on the "Search" on the top right and type “1099-R” 
  2. Click on “Jump to 1099-R”
  3. Answer "Yes" to "Did you get a 1099-R in 2021?"
  4. Enter you Form 1099-R
  5. On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.
  6. Click "Continue" after all 1099-R are entered and answer all the questions.
  7. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" if you are over 59 1/2 (if you are under 59 1/2 click "Continue")

 

 

 

@ahmadka2

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