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"The IRS rules at https://www.irs.gov/individuals/international-taxpayers/individual-retirement-arrangements clearly say that foreign income counts even if it is exluced."
No, that is not what it says. Excluded foreign-earned income (and other income excluded from AGI) is expressly not compensation that will support a traditional or Roth IRA contribution; the law has not changed with regard to this (§ 219(b)(1)). What the reference you cite says is that excluded foreign earned income must be added to AGI in determining whether or not this modified AGI exceeds the limit for being eligible to make a Roth IRA contribution or to be eligible to deduct a traditional IRA contribution that you can otherwise make using other money that is eligible compensation.
TurboTax correctly implements this and has not changed in its treatment of this. Perhaps in the past you had other, non-excluded income that supported your regular IRA contributions.
Thank you for your reply. It seems odd since this is the 8th year I have been reporting Roth IRA contributions and 100% of income has been Foreign excluded and never before was there an issue.
Either you've been filing tax returns reporting excess Roth IRA contributions and didn't recognize you were doing so, you didn't actually report the Roth IRA contributions, or not all of your compensation was excluded and you did have compensation that was not excluded sufficient to support the annual contribution. If for those 8 past years you had no compensation other than the excluded foreign earned income and you made the maximum contributions (without regard to the fact that you did not have the supporting compensation) for those years, it seems that you have accumulated over $14k in penalties and interest and will continue to accumulate penalties and interest at a rate close to $3k per year until the excess is corrected.
If you've actually made the excess contributions you've described, it might be prudent to consult a tax attorney.
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