In 2022 for tax year 2021 I paid TurboTax the full price “live premier full service” do it for me tier, it was a complicated year, that seems to be impacting us this year (2023 preparing for year 2022 using TurboTax Premier and hoping I dont have to pay to upgrade to live since I think I understand the tax issues alright, just not how to make TT do it the way I want to).
1 - Selling a house in 2021 tipped our married household income to a level where we could not contribute to ROTH IRAs (though we already had) so we needed to withdraw our fully funded (mine and wifes) Roth IRAs 2021
2 - in early 2022 we contacted fidelity investments to do a "withdrawal of excess contribution" for 2021 - they did, returning the contributions for each, minus the losses (there were no gains, only losses.)
3 - we also funded both of our ROTH IRAs for 2022 fully.
4 - I then withdrew my contribution for 2022 to help pay the tax bill due but left my wife's in place
5 - This year (2023 preparing for 2022) I entered the 1099 Rs with codes P and J for the excess contribution and withdrawals and got the turbotax warning (you may need to file an amendment) which (side note)
(A - even if we only have LOSSES on ROTH (post tax money?) Are we sure we need an amendment and
B - shouldnt that be done for us by the “live premier full service” plan applicable to 2021? )
6 - Anyway for 2022- I also entered the 1099-R with only code J for the one withdrawal of my contribution and entered the interview questions about having ROTH IRas for minimum of 5 years (yes) and what was total NET contributions prior to 2022 (I think thats TT trying to understand basis ) - I know for sure I'm well over the basis and its all ROTH
7 TT interview questions ask again later about ROTH IRA contributions (for both me and my wife) and I answer them, including the details about having had past excess contributions - but TT doesnt give me an entry or checkbox to state clearly I HAVE WITHDRAWN THOSE (like I reported to you in the 1099R earlier.)
8 So somewhere (and I think it must be on my wife's 2022 contribution that Ive still left in place?), Turbotax seems to think I have made an excess contribution and is charging me the 6% penalty tax on it. (https://www.irs.gov/publications/p590a#en_US_2022_publink1000231027)
9 This is despite my making every effort to enter all the 1099 Rs, accurately answer the basis questions and understand how to interpret the several different ways TT is asking about the same (4? max? 1 my 2021 contribution and withdrawal (with losses), 2 wifes 2021 contribution and withdrawal (with losses) 3 my 2022 contribution and withdrawal (of contribution only) 4 wife's 2022 contribution and no withdrawals) items
10 Is there a way to get through this without paying extra for live tax help to navigate through the confusing interface TT has built? (I already spent 82 minutes on a call with a very nice product support (but not tax advisor) specialist on 2 separate issues (turbotax erroneously carried special conditions forward from 2021 without interviewing me about them then threw errors during its review) and got disconnected while talking about this with no callback or email follow up. I'm very frustrated with intuit right now to be thinking Ill have to pay extra to get them to explain the complexities of their choices in user interface design and copy writing.
Thanks for any help anyone.
