This might be suggesting that you had a $5,500 excess contribution carried into 2019 from 2018. It could also mean that you only had $500 of compensation from which to make the contribution for 2019. You must have compensation to be able to contribute to an IRA.
I had enough compensation from an employer to contribute to an IRA, and no excess contribution from previous years, so I'm confused as to why I'm getting hit with excess contributions. Any ideas? @dmertz
If your AGI is $167,000 and you are covered by a retirement plan at work, if you are Married Filing Joint the income limit to contribute to a Traditional IRA is $103,000 to receive the full deduction for the contribution.
If you are Single the income amount is limited to $64,000.
If you do not want to pay the penalty you need to remove the excess amount before you file your return.
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You are apparently filing jointly. If you spouse does not work and your spouse also made an IRA contribution based on your compensation, the total of the two contributions cannot exceed the amount of your compensation.
However, an $5,500 was the contribution limit for 2018, so it would seem to be an unusual coincidence if the excess was not coming in as an excess contribution that had been made for 2018. Examine Form 5329. Using online TurboTax, you'll need to pay for TurboTax before you can download and print.