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New Member
posted Dec 29, 2022 11:35:43 AM

I contributed to a Roth IRA in 2021. My final MAGI was just over $250,000. TT did not tell me I was ineligible to contribute. How do I pull it back/pay the penalty in TT?

TT did not tell me I was ineligible for the Roth contribution when I filed. I have the same situation with my  spouse's contribution,  so I guess we have to do it twice.  

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2 Replies
Level 15
Dec 29, 2022 1:15:28 PM

The deadline for obtaining a return of the excess contribution before the due date of your 2021 tax return has passed.  You must file Form 5329 Part IV and pay the 6% excess contribution penalty for 2021.  To avoid another 6% penalty for 2022 on this excess you must either be eligible to apply the excess as part of a 2022 Roth IRA contribution or you must obtain before the end of 2022 a regular distribution (not a return of contribution) of the amount of the excess with no adjustment for investment gain or loss.  Given that tomorrow is the last business day of 2022, you'll need to obtain that distribution by close-of-business tomorrow.  Both you and your spouse need to do this.

Level 15
Dec 31, 2022 8:09:42 AM

Going forward ... if you entered in all your income first and then entered the ROTH contribution then the program does and will alert you to the excess contribution if any.   I highly recommend you review the return you filed ... use the amendment process if needed ... and look again.  The excess is based on a MAGI so you may not have made too much so review the IRA contribution worksheets.