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New Member

What is form 5329?

 
5 Replies
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Employee TurboTax Specialist

What is form 5329?

Please see below article from the IRS that explains in detail from 5329:

https://www.irs.gov/forms-pubs/about-form-5329

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Level 2

What is form 5329?

Thank you HeatherPLO.

 

I have bought TurboTax Delux and might need to file IRS Form 5329 [ Traditional IRA account has Excess Contribution withdrawal before age of 59 ]. I am not seeing any option in TurboTax software [installed in my PC] to add Form 5329. Can you please guide me ? 

 

My situation: I have deposited $5500 into my wife traditional IRA account in ~Dec 2019 for 2019 year, but due to total gross salary exceeded its limit so cannot take tax advantage on my deposit to IRA so requested to withdraw. Fidelity sent me excess contribution amount $5500 and earnings [ $11.05 ], but Fidelity will send my 1099-R form in Jan 2021. I think I have to file this withdraw in 2019 tax filling, right ? Any helpful guidance in this filling. Can I file online using TurboTax or I have to file paper base.

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Employee Tax Expert

What is form 5329?

You can indicate in Turbo Tax that you will withdraw the excess by 07/15

  1. Go to federal>deductions and credits>retirement and investments>Traditional and Roth IRA Contributions(assuming this is where you reported the contribution
  2. go through the series of questions.  Be sure to indicate you are covered by a retirement plan at work
  3. You should reach a screen that says You Currently Have a Penalty  at the bottom of the screen is where you indicate the amount of the excess contribution that you will return before 07/15. 
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Level 2

What is form 5329?

Thank you "John" for your quick reply. 

 

Regarding step #2 from your reply, my wife [ Traditional IRA acc where I contributed and later withdraw ] is working part time and her employer doesn't cover "Retirement Plan at Work", sorry I missed to inform you before. 

 

Questions from Turbotax SW as below in sequence: 

 

"Retirement Plan at Work" -> No

"Any Excess IRA Contribution before 2019" - > No [ as I contributed in Dec 2019]

"Any Nonedeductible Contributions to wife's IRA ?" ...from 2018 or prior year -> No

"Some of your IRA contribution isn't Deductible" -> Continue

Not seeing anything like what you have mentioned. 

 

Note: I am working full time and my employer has 401k plan, but my wife is part time worker with no retirement plan from employer, so I have created her Traditional IRA acc ourself.  

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Employee Tax Expert

What is form 5329?

Yes. You can contribute to your wife's Traditional IRA. However, because you have a 401(k), it can reduce your IRA deduction.  Turbotax will do the calculation. 

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