Hi
I’m having difficulty understanding how TT 2025 Premier (Desktop version) calculates the combined maximum allowed contribution on the ROTH IRA Contribution Limit Worksheet (line 6). I think it incorrectly calculates the maximum contribution given what is asked on line 1 and what is calculated as the basis for line 6 given the output of lines 3 and 4. I would greatly appreciate how the values in the worksheet are determined. Here’s the background
Assume
Filing status: married couple to file jointly
Income: $0 Adjusted gross income from Form 1040
Age: 70+ for both
MAGI: $241,000
ROTH contributions for 2025: $3500 actually contributed per taxpayer and spouse in 2025
IRA contributions for 2025: $0
No prior ROTH or conventional IRA contributions for last 10 years
Using the TT ROTH IRA Contribution Limit Worksheet the following occurs:
Line 6: Here it lists the maximum contribution for a married couple filing jointly (ie, $16,000). I think this is incorrect since no adjustment is made for the phase out of contributions given MAGI exceeds $236,000 for married couple filing jointly.
Line 10: Correctly shows the actual 2025 Roth contributions for both taxpayer and spouse (ie, $3500 each)
Line 16: Shows the limited contribution for both taxpayer and spouse is $0, which I think is incorrect and should be $3500 for taxpayer and $3500 for spouse
Questions:
- Shouldn’t line 6 of the TT ROTH IRA Contribution Limit Worksheet show a maximum allowable combined ROTH IRA contribution of $8000, which according to the IRS Phase out contribution calculator (Worksheet 2-1 of Publication 590-A) is $4000 per taxpayer? Why else ask for income (line 1) and calculate the Maximum Contribution based on line 4 adjustment?
- Consequently, shouldn’t line 8 of the TT Worksheet reflect the maximum allowable contribution of $4000 per taxpayer?
- The actual amounts contributed to ROTH IRAs (ie, $3500 each) are well below that limit so why is TT showing the maximum ROTH contribution for 2025 is $0 on line 16 of the worksheet
- Why does line 23 for Form 5329 show excess contributions of $3500 for both taxpayer and spouse when this value is below the maximum allowable ROTH IRA contribution of $4000 per taxpayer?
- Why would line 25 of Form 5329 show a penalty of $210 (for the excess contribution of $3500, taxed at 6%) when the actual maximum contribution limit is $4000 and the contribution was made in 2025?
Thanks for responding.
