I over-contributed to my IRA so I withdrew the excess and earnings. When I enter the info in the IRA field on Turbotax, it reduces my refund by $300. What is going on?

Once I removed the excess, my contribution for the year is the allowable amount. So it doesn't make any sense that my refund is being reduced by $300. I tried a test and just entered the final amount and made no mention of excess contributions and my refund went back up. I don't get it. It seems like I'm getting charged a penalty even though I have removed the excess before filing.

266

Level 15

Jul 8, 2020 5:34:26 PM

If you removed it then there is no excess so only enter the amount after the removal as your contribution.

Level 15

Jul 8, 2020 9:47:46 PM

"excess and earnings"

Those earnings are taxable income and that is going to reduce your refund.

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I over-contributed to my IRA so I withdrew the excess and earnings. When I enter the info in the IRA field on Turbotax, it reduces my refund by $300. What is going on?