"Enter the value of your Roth IRAs on December 31, 2019" Is value my contribution, or total account balance (which is higher from contribution cos of investment)? fund)

[dmertz · Accepted solution]

It's the total amount of money you had in Roth IRA accounts on December 31, 2019.

[johnvalentine2]

One additional question on this.  The instructions also say to include any post Dec 31st contributions made that were designated for 2019.  So that's for any amount that we might be contributing prior to April 15th earmarked for 2019, correct?  I'm not sure I understand the ask for value of Dec 31st if we still have a 2019 contribution to make.  The Dec 31st value is not a cost basis and will still be off by market volatility as any dividends within the underlying holdings.  So if I have a value of $50k at Dec 31st and I'm over 50 yrs old with plan to put in $7k for 2019, then $ value for this question would be $57k, correct?  

[dmertz]

Correct.  Contributions made for the prior year after December 31 but before the due date of the tax return, must be included in the total when figuring the amount on which the excess contribution penalty is calculated.  This is to avoid having the excess contribution avoid the required 6% penalty for the year of the contribution just because the contribution was made after year end.

"So if I have a value of $50k at Dec 31st and I'm over 50 yrs old with plan to put in $7k for 2019, then $ value for this question would be $57k, correct?"

Correct.  Of course this entry only is only relevant if you have excess contributions in your Roth IRAs; it is used for no other purpose.  TurboTax does not ask this question unless your tax return currently shows excess contributions subject to an excess-contribution penalty.

[johnvalentine2]

Thanks for the prompt response @dmertz .  Now I'm curious about your references to excess contributions.  Not sure how the questions TT is asking determine excess.  Back to my hypothetical...Roth has $50k Dec 31st.  By my actual basis through the year might be $30k (with great returns).  And I'm going to add $7k for 2019 ($6k base and $1k catch up).  How (or why) does any of this matter or become relevant to excess contributions.  I'm sure I'm missing something....  Maybe I'm perplexed at why does TT need to know value as of Dec 31st?  Given it can change w/o add'l contributions, why does it matter?  Just trying to satisfy curiosity and remain semi-sane.  

On separate, but similar note, it would be great if TT had a calculator prior to entering IRA/Roth IRA values to actually see what if amount we can contribute to either type of account.  I'm fortunately enough that most years I'm in the "sliding IRA contribution" scale for yes/no/some to Roth or deductible IRA.  But I have to fill them out, run check, redo or change to other type and try several times before I can determine exactly what I can contribute, if anything.  A small problem to have, but would love a quick table that adjusted real time as we completed our taxes to tell us what we could contribute to either or both IRA type of accounts for self and spouse.  Pardon the tangent commentary.

[dmertz]

Perhaps you are ineligible to make a $7,000, either because you did not reach age 50 before the end of the year, you had less than $7,000 of compensation or your modified AGI exceeds the threshold for your filing status.

[fanfare]

Turbotax has a "Max my SEP contribution" button, but not a "Max my Roth contribution" button.

The issue is your return must be complete in all other respects before you press the button.