Get your taxes done using TurboTax

You have to wait until your original return has been processed before you can amend your 2021 tax return.

Yes, the earnings from the excess contribution increase your 2020 MAGI and therefore trigger a new excess contribution on your 2020 tax return. Please make sure that you entered the original excess contribution amount (no earnings or losses) as withdrawn by the due date on the penalty screen. Then TurboTax will only calculate the 6% penalty on the new excess contribution.  

1. Click on "Search" on the top right and type “IRA contributions” 
2. Click on “Jump to IRA contributions"

On your 2021 tax return, you will enter your Roth contribution for 2021 and enter the excess when asked:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. Enter your Roth contribution for 2021
5. Continue until the "Do you have any Excess Roth Contributions" screen and answer "Yes"
6. On the "Enter Excess Contributions" screen enter the new excess contribution from 2020

To avoid the 6% penalty on the new 2020 excess contribution on your 2022 tax return you will have to remove the new excess by December 31, 2022. You only need to withdraw the excess (without earnings or losses). For example, if your new excess is $200 then you need to just withdraw $200 as a regular distribution (you do not request the withdrawal of an excess contribution). You will get a 2022 Form 1099-R with code J (if you are under 59 1/2) and report it on your 2022 tax return. 

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