Retirement tax questions

The value of the Roth IRA accounts is the balance on December 31, 2022 (you can find it on your statement). To calculate the 6% excess penalty on line 25 of Form 5329 you use the smaller of the value on your statement on December 31, 2022 (and add any contributions you made for 2022 in 2023) or the excess contribution amount (TurboTax will ask during the IRA contribution interview about the value).

For 2022 the total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than:

• $6,000 ($7,000 if you're age 50 or older), or
• If less, your taxable compensation for the year

Also,  your Roth IRA contribution may be limited based on your filing status and income. Please see
2022 - Amount of Roth IRA Contributions You Can Make for 2022.

Excess contributions are taxed at 6% per year for each year the excess amounts remain in the IRA. The tax can't be more than 6% of the combined value of all your IRAs as of the end of the tax year (therefore TurboTax is asking about your value during the IRA contribution interview).

To avoid the 6% tax on excess contributions, you must withdraw:

• the excess contributions from your IRA by the due date of your individual income tax return (including extensions); and
• any income earned on the excess contribution.

Please see What happens if I made an excess Roth IRA contribution for additional information.