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momtoisabelle
Returning Member

bug that doesn't remove past year's excess Roth contribution

I made an excess contribution to my IRAs in 2016 and removed them in 2017. I received the 1099-R forms for 2017 that show this. When you enter the info, TurboTax removes the excess correctly from the Traditional IRA, but fails to remove it from the Roth. Hence, the excess contribution with the penalty gets carried forward from year to year. I'm amending my 2017 return to get back the penalty because with the amendment software you can go in and change the data manually. However, how do I get rid of the contribution that Turbotax still thinks is in there in my 2018 taxes?? It's carrying it forward from my unamended 2017 return. I realize now that if I had the download version of Turbotax I could manually fix the problem through the forms view, but I already paid for the web version and I don't want to pay twice. Any ideas? Thank you!

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3 Replies
dmertz
Level 15

bug that doesn't remove past year's excess Roth contribution

There is no bug with this.  Entering into TurboTax a code 8 or code P (with code J if from a Roth IRA) for removal of an excess contribution before the due date of the tax return for the year for which the contribution was made is not how you remove the excess contribution in TurboTax.  Removal of the this excess requires you to go through the Traditional and Roth IRA Contributions section, in this case in your 2016 tax file, and, when TurboTax indicates that you have an excess contribution entering the amount of excess you had removed before the due date of your tax return.  Entering the code 8 or P Form 1099-R serves only to cause any taxable gains shown in box 2a of the form to be included in income.

 

A return of excess contribution made after the due date of your tax return is resolved by making a regular distribution from the account and is reported with code 1 or 7 for a traditional IRA or code J, T or Q for a Roth IRA.  Entering either of these into TurboTax for some year after the year that reported an excess contribution on Form 5329 will cause TurboTax reduce the excess carried in from the previous year.

 

If the returns of the 2016 contributions was made before the due date of your 2016 tax return you probably need to go back and amend your 2016 tax return, amend your 2017 tax return, and make the correction in your 2018 tax return to remove the excess carried in from your 2017 tax file.  To reach the section where TurboTax asks about your excess contributions, revisit the Traditional and Roth IRA Contributions section, indicate that you have both traditional and Roth IRAs, then proceed through the questions that follow.

momtoisabelle
Returning Member

bug that doesn't remove past year's excess Roth contribution

I entered the dollar amount of the distribution in the Retirement Plans section. The distribution is usually larger than the contribution due to income. For some reason Turbotax didn't put the amount on lines 11 or 20 of Form 5329. This has to be a bug.

dmertz
Level 15

bug that doesn't remove past year's excess Roth contribution

What is the code (or codes) in box 7 of the 2017 Form 1099-R provided by the payer and that you entered into TurboTax's 1099-R form?  Into what year's TurboTax did you make this entry?

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