I have been doing my daughter's taxes for years. I am not a tax expert but I thought I knew enough to help her out. Until things got complicated, that is. She got married last October (2021) to a person who makes an almost equivalent salary ($100K each). With their salaries and investments, their joint MAGI is around $222K. He put $7K in his Roth and she put $6K in her Roth last year. I put all the information into TT and there was not any red flags raised. However, I did notice that there was an extra tax of $780 on line 23, Sched 1040 (from Schedule 2, line 21). After trying to understand "why," I think it is connected with the two Roth IRA investments. When I researched the eligibility for them to invest in Roth IRAs, I find the MAGI simply makes the Roth investments disallowed (with their combined salary they are now ineligible to use Roth IRAs.) Why was this situation not flagged by TT? Why is there this extra tax? Should the IRAs be recharacterized into non-deductible traditional IRAs immediately? What is the proper way to proceed with the IRA situation? I suggested she obtain some real tax advice to actually prepare her 2021 taxes but at this juncture, it is too late to find anyone until after April 18. How should I advise her to proceed in the next two weeks and get a delay in submitting her taxes so a tax expert can complete her 2021 taxes?
