If TurboTax asks for your year-end balance immediately after you have entered your traditional IRA contribution, it's because TurboTax believes that you have made an excess contribution. The 6% excess contribution penalty is calculated on the lesser of the excess contributions in your traditional IRAs or the year-end balance for the tax year of the contribution.
Regarding the excess contribution, make sure that you have not entered as a regular traditional IRA contribution any contribution to a workplace retirement plan. Also, to make a regular traditional IRA contribution you must have sufficient eligible compensation to make the contribution. Compensation is generally income reported in box 1 of your W-2 (minus any amount in box 11) or net earnings from self-employment. Also, any amount of earnings on which you claim a Foreign Earned Income Exclusion is not eligible compensation. If you are married and your income is less than that of your spouse, your IRA contribution can also be based on the eligible compensation of your spouse. The maximum permissible regular traditional IRA contribution for 2017 is $5,500, plus $1,000 catch-up if age 50 or over in 2017.
