Retirement contributions

[marney]

I was 63 at the end of 2023. Turbo tax is saying I went over the limit for retirement investments for 2023. I opened a ROTH IRA by transferring 5000.00 into it.  My total contributions is 7500 and according to Turbox Tax I have to pay a $360 penality fee.  I thought the maximum contributions was 7500 if you're over 50,  What am I doing wrong?

[DanaB27]

Did you still have earned income? You need taxable compensation to make IRA contributions.

For 2023 the total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than:

• $6,500 ($7,500 if you're age 50 or older), or
• If less, your taxable compensation for the year

Also, your Roth IRA contribution may be limited based on your filing status and income. Please see Amount of Roth IRA Contributions That You Can Make For 2023.

Please see What happens if I made an excess Roth IRA contribution.

[fanfare]

The first thing to do is file Form 4868 now, before April 15. OR file your tax return by April 15.

That gives you until Oct 15 to straighten this out, however you decide to do it.

@marney 

Note: If you fix it after you file, you would have to amend.