IRA contribution is showing up as excess but I contributed $6,500 in January 2024 for the 2023 year and $7k in November 2024 for 2024 year. Can't figure out the fix in TT

[bradleybenson16]

It wants me to pay a penalty for an excess $6,500 contribution but it shouldn't be considered excess. Both were rolled over to roths within a week of having been added to the account.

[VolvoGirl]

Don’t enter the amount for 2023.  That should have gone on your 2023 return.  

[bradleybenson16]

but the $6,500 is on my 1099-R which is why it’s getting included.

[VolvoGirl]

Contributions are not on a 1099R.  That shouldn’t affect it.   You only enter Contributions under Deductions & Credits.   That’s where you only enter the 2024 7,000.   

[bradleybenson16]

Ah got it that makes sense, thank you!

[bradleybenson16]

Sorry one follow-up, that change makes it so $6,500 is taxable when I get to my retirement income results, instead of $0, based on the 1099-r so how do I fix that part?

[VolvoGirl]

I think you did a back door Roth?  I don’t know about those.  I’ll ask @dmertz 

[dmertz]

Examine both your 2023 and 2024 Forms 8606.  If you did not have a zero balance in traditional IRAs at the end of 2024, I would expect that calculations on Form 8606 to result in some of the 2024 Roth conversion being taxable.  If Form 8606 line 2 does not include the $6,500 that was contributed for 2023, it implies that on your 2023 tax return you did not report the $6,500 as a nondeductible traditional IRA contribution or you did something to cause that amount not to be transferred properly to your 22024 Form 8606.

[bradleybenson16]

Feels like this is trending towards me needing to hire someone and not being able to use TT to fix. Can't say I know where to even find a previously completed form 8606. I had zero balance in my traditional IRA at end of 2024 as it had all already been rolled over to the Roth. My best guess is that TT didn't log the January 2024 traditional IRA contribution and subsequent rollover as one for 2023, and not 2024, so the system now wants me to say that I contributed $6,500 over what I am able to in 2024 or that the $6,500 is actually gains that are taxable when neither should be the case. 

[dmertz]

"My best guess is that TT didn't log the January 2024 traditional IRA contribution and subsequent rollover as one for 2023"

A traditional IRA contribution made fore 2023 was required to have been reported on your 2023 tax return as either deductible (Schedule 1 line 20) or nondeductible (Form 8606 line 1).  If you failed to enter the contribution, you would need to amend your 2023 tax return.  If the traditional IRA contribution was deductible and reported on Schedule 1 line 20, that contribution created no basis in nondeductible traditional IRA contributions and you would also have to amend if you wanted to change that to being nondeductible.  Whatever amount is on line 14 of the 2023 Form 8606 carries forward to line 2 of your 2024 Form 8606.

Also make sure that you did not somehow report on your 2023 tax return a Roth conversion done in 2024.

Any Roth conversions done in 2024 are reportable on your 2024 tax return.  It doesn't matter when the funds being converted were originally contributed.