I started a Vanguard Roth IRA in 2011. This year I contributed the max $7k, but not over, yet TurboTax flags excess contribution. I make over 161k & have a Fidelity 401k

There are income limitations to contributing directly to a Roth IRA.  If you are single and your modified AGI is over $161,000, then you're ineligible to contribute directly to a Roth IRA.  Please reference this IRS document.

If you have an excess contribution, you can withdraw it by 4/15 to avoid the penalty (make sure you also withdraw any earning on the contribution). Or, you could contact Vanguard to recharacterized this a traditional IRA.  See: What if I made an excess Roth IRA contribution because my income is too high?