DanaB27
Expert Alumni

Retirement tax questions

No, you will have to enter the Roth contribution and figure out why you are having an excess contribution. Because if you don't remove the excess contribution you will have to pay the 6% penalty on the excess contribution for each year the excess stays in the Roth IRA.

 

Did you have enough taxable compensation (wages, salary, self-employment income)? Retirement income, dividends, etc doesn't count.

 

Or was your modified Adjusted Gross Income (MAGI) too high to make Roth IRA contribution? Please see 2022 - Amount of Roth IRA Contributions You Can Make for 2022 for details.

 

Yes, you entered correctly $6,549. 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.

 

If you have an excess contribution because you do not have any taxable compensation then you will have to remove the excess contribution plus earnings by the extended due date. Please request the withdrawal of excess contributions plus earnings with your financial institution. 

 

If your MAGI limits your Roth IRA contribution then please see What happens if I made an excess Roth IRA contribution.

 

 

@999dwdw 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"