My Federal tax amount goes up when I input Roth contributions? If I delete the Roth the tax owed goes back down to the amount before inputting the Roth contribution?

[sudiki]

I do not exceed the modified AGI to be able to contribute to a Roth.  This has happened the last 3 times using premier.

[dmertz]

This result implies that you've entered a Roth IRA contribution in excess of the amount that you are permitted to contribute and TurboTax is calculating an excess contribution penalty.  Either you have insufficient compensation to support the contribution, your modified AGI for the purpose and your filing status makes you ineligible to make some or all of the contribution, or you've entered more than the overall annual maximum IRA contribution for your age.  Make sure that you are not entering Roth 401(k) contributions as a Roth IRA contribution.

[sudiki]

None of your reasons apply.

I am 60 yrs old.  I know what the max is including catchup for each year.

I make 110K, well under the modified adjusted AGI for a married filer.

They are contributions from my banks cash money market account;  and are not Roth 401k.  (which are employer sponsored)

Thanks for the reply.  

[dmertz]

I'm sure it's one of the items I mentioned.  Since the online version of TurboTax is not yet available you must be using the CD/download version of TurboTax.  Switch to forms mode and examine the Roth IRA Contribution Limit Worksheet (likely last on the forms list or just enter Roth IRA in the Open-form form-name box).  It will show why TurboTax is seeing an excess Roth IRA contribution.  Examine Form 5329 Part IV to see the calculation of the excess contribution penalty.

[Critter]

If this is on the 2019 program then be patient as that program is not fully functional and is still buggy.  It will have many updates between now and late January before the program is ready to use to file a return.  

[sudiki]

Sorry; wrong again.  I use the on-line version each year.  (Note:  The reason I posted this question is tax time is around the corner)  :(

When TT asks if I contributed to a Roth I answer yes, put in the amount and watch as my federal tax bill shoots up.  I delete and it goes back to where it was.  

[sudiki]

You must have missed that it has happened multiple times in the past filings.....

[VolvoGirl]

Are you also contributing to a Traditional IRA?  The max is for both combined.

[sudiki]

No.

[VolvoGirl]

Or entering both your and your spouse's contribution together?  Is your income on a W2 or is that the Net Profit on self employment income?  For self employment income there is another calculation you have to make.  It might think you are contributing more than the earned income.  What kind of income?  Are you filing a Joint return or MFS?

[dmertz]

Since you originally made no mention of this being a question about past behavior, I assumed that this is behavior that you are presently seeing by making entries into TurboTax.  Since you are referring to behavior that you are remembering from preparing some past year's tax return with the online version of TurboTax, examine the Roth IRA Contribution Limit Worksheet and Form 5329 contained in the pdf of all forms and worksheets that you downloaded after preparing your tax return.

Also, the refund/balance due calculation is relatively meaningless until you've completed all entries for your tax return.  For example, entering a Roth IRA contribution before you enter your compensation would certainly result in TurboTax seeing the contribution as an excess contribution.  In this case the penalty would disappear when you enter your compensation, provided that that compensation did not put you over the MAGI limit for your filing status and the compensation was not excluded foreign earned income.

[Critter]

I highly recommend you use the Downloaded version of the program so you and switch to the FORMS mode at will ... this way you can look at the return in its entirety before and after an entry that changes the Refund-O-Meter ... this may be the only way for you to see what is happening and why.  

[sudiki]

I appreciate the replies.  But clearly some people are not reading my original question/or reading into them.  

"For example, entering a Roth IRA contribution before you enter your compensation would certainly result in TurboTax seeing the contribution as an excess contribution."   I follow TT directions and flow. I do not "jump" around. 

I also said that this has been seen in previous years taxes with TT.  (Past behavior)   I'm not sure this is helping me because we are getting into the weeds here:  "and the compensation was not excluded foreign earned income"  I mentioned nothing of FEI.

I do see that the statement that:  "Also, the refund/balance due calculation is relatively meaningless until you've completed all entries for your tax return."  may be relevant.  Maybe I should just continue with the return and before actually submitting;  see what the tax owed/due is?  Although I think I tried that at least once.

Thanks.

Any other ideas?

[dmertz]

If you make your entries in the normal sequence that TurboTax guides you through, I think you will have made all of the entries needed to determine the permissible Roth IRA contribution.

A few times in past years the IRA contribution limits or MAGI threshold had not been updated for the year with the initial release of TurboTax.  If you were using online TurboTax before mid-January, if you contributed the maximum or your MAGI was close to the limit you might have seen TurboTax show an excess contribution prior to the software being updated (sometime before the opening of filing season) to make the correction.  Also be aware that if you are Married Filing Separately the permissible Roth IRA contribution phases out over a MAGI range of $0 to $10,000.

Regardless of the specific reason, the only way entering a Roth IRA contribution can cause TurboTax to show an increase in the federal tax due is by TurboTax calculating an excess-contribution penalty.  There is no other mechanism.  This question comes up numerous times on the TurboTax forum each tax year.

[Critter]

Contact TurboTax support and speak directly with a TurboTax support agent concerning this TurboTax support situation.

See this FAQ for a contact link and hours of operation -https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number