For years, I've been doing backdoor Roth IRAs. I'm now semi-retired, with uneven earnings. While I'm doing a backdoor, my question has more to do with the IRA contribution, which in my case is nondeductible.
For 2024, my W2 and 1099 earnings were less than my IRA nondeductible contribution, which I then rolled over to a Roth. Note that I received significant nonqualified deferred compensation, which from what I read does not count toward "earned income".
While I have not yet filed my taxes, Turbotax accepted this - again my contribution was less than my "earned income" (assuming my nonqualified deferred compensation receipts are not eligible). Am I looking at something wrong? Why would Turbotax accept this, without pointing out via an error message?
And if I overcontributed, since I haven't filed my taxes, can you direct me the correct process to address?
If the nonqualifying deferred compensation was reported in box 11 and box 1 on your W-2 entry, and you checked the "yes" box on the screen that says Did you take money out of your nonqualified plan? then the distribution should not be treated as earned income in TurboTax. I suggest you check those entries and let us know if that does not resolve your issue.
If the nonqualifying deferred compensation was reported in box 11 and box 1 on your W-2 entry, and you checked the "yes" box on the screen that says Did you take money out of your nonqualified plan? then the distribution should not be treated as earned income in TurboTax. I suggest you check those entries and let us know if that does not resolve your issue.