Hi,
We made maximum contributions of $6500 to each of our Roth IRAs in 2018. When preparing taxes in 2019, I learned our AGI reduced our maximum allowed contributions. TurboTax indicated we each had an excess contribution of $480. I had the $480 plus earnings ($33 and $27) removed from each IRA prior to the April 15, 2019 deadline. This resulted in 2018 Roth IRA contributions of $5987 and $5993 which matched the limits on Line 16 of the Roth IRA Limit Worksheet.
I am now amending my 2018 return to pay the taxes on the interest earned from the excess contributions using the 2019 1099-Rs I received this year for these transactions. They are dated 2019 and have codes J and P in Box 7. After entering the information for each account, the Roth IRA Limit Worksheet has computed a new limit of only $5980. As a result, the Forms 5329 report excess contributions of $7 and $13, respectively with the additional 6% tax assessed.
If I've done all this properly, it appears the $60 earned on the original excess contributions increased our AGI and further limited our allowable contribution limit.
I'd appreciate your advice on how to deal with the new excess contributions ($7 and $13) in my 2019 tax return and break out of this endless loop! Thanks in advance for your help.
Larry
