ROTH IRA

Forum|Forum|2 years ago
February 28, 2024
3 replies
20 views

I received a 1099 NEC for $6030 and contributed the full $6030 to my ROTH IRA. Married filing jointly with total income of $135000. TurboTax is saying I can only contribute $5034. Can you please explain.

TurboTax Deluxe Online

MinhT1

Level 15

Your earned income for the calculation of Roth IRA contributions is equal to your self-employed income minus the deductible part of self-employment tax.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

fanfare

Level 15

You didn't say what year you specified for the contribution.
return of excess contribution:

before tax filing date including extension properly requested: positive earnings allocable to the excess are taxable on the Line 4b for the year of the contribution. negative earnings are ignored; in which case, for purposes of basis, consider the original requested amount as returned.

You must use the "return excess plus earnings" form.

If contribution for 2023 (2024), INSTEAD

if you are allowed a Roth contribution in 2024 (2025), you can use that to offset the excess of $996.

You will pay a penalty of 6% which is $60, everything will stay in the Roth.

@kriztwo

BillM223

Level 15

As you probably know, Roth contribution limits are related to the MAGI for Roth IRAs. However, there is currently an issue with how the Roth AGI is being calculated. This may explain what you are seeing.

Please see "Why is my Roth IRA MAGI not calculating correctly?" and sign up to be notified when there is an update.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"