There is an error with Form 5329 generated by turbotoax.

[jejsblue]

I used Turbotax for 2020 return, and Turbotax didn't generate form5329 because my $6000 contribution to ROTH IRA was fully eligible with my AGI income.

I used Turbotax for 2021 return. I contributed $6000 to Traditional IRA in 2021. When I entered this value, Turbotax asked me to enter any excess IRA contribution amount from 2020 where I entered no (entered: 0).

Technically, turbotax shouldn't create a Form 5329 in the first place, but it created Form 5329 with the excess amount $70 in line 18. Two turbo tax specialists tried to correct this issue, but they couldn't. I don't know where this $70 is coming from nor I couldn't fix this online. Please advise.

[BillM223]

Did TurboTax create the 5329 on your 2021 tax return?

Well, line 18 on the 5329 does indicate that TurboTax thinks that that you overcontributed to a Roth IRA, but you just said that you didn't contribute to a Roth IRA in 2021.

When TurboTax asked "Turbotax asked me to enter any excess IRA contribution amount from 2020", did it specify traditional or Roth IRA?

Since your entry for 2021 was for a traditional IRA, can you head on back to where you would have entered a Roth IRA contribution and see if there is anything there?

This sounds like your contributed $6,000 to the traditional IRA (as you said), but that there is something that shows as a Roth IRA contribution in your return, which would automatically be in excess because you maxed out both IRAs at $6,000.

Take a look.

[jejsblue]

1. This is the exact statement that Turbotax asked me "This amount should be the total excess contributions you made to a traditional IRA as of the date your 2020 tax return was filed.", and I answered 0.

2. I reviewed every section in Turbotax and the complete Tax Documents generated by Turbotax, and I don't see anything that should count as $70 exceeded contribution to ROTH IRA. In fact, Turbotax sums up all IRA contribution(s) and show it in a single box where the number is $6000.

[BillM223]

OK. It may be that TurboTax thinks you carried over an excess contribution of $70 for a Roth IRA from 2020 to your 2021 return, for whatever reason.

This carryover would be found on the Carryover Worksheet.

However, if you are using the Online version of our software, you can't see the Carryover worksheet. Is there any chance that you are using the CD/download version of our software?

[jejsblue]

You are suggesting that there might be a carryover from 2020 tax return, correct? I went over all sections in IRA worksheet and couldn't find anything that indicates $70 excess amount. Specifically, I found this section 'Carryover of excess contributions to 2021' and it's empty.

If you have a permission to take a look into my tax information, would you or escalate this please? This is my third time reporting this issue to Turbotax, and it's not resolved without a follow up.

[BillM223]

To send us a token (which is a sanitized version of your tax return, with all personally identifiable information obscured), please do the following: 

TurboTax Online:  

Click Tax Tools in the menu to the left.

Click Tools, and then

Click Share my file with Agent.

A pop-up message will appear. Click OK to send the sanitized diagnostic copy to us.

Provide the token number that is generated onto this thread.

TurboTax Desktop:

Select Online menu if the customer is using Windows. Select “Help” if using a Mac.

Select Send Tax File to Agent.

A pop-up message will appear, and the customer will select, Send. If using Mac "Send Tax File to TurboTax Agent" 

Note: Desktop will save a file to your computer unless you uncheck the box.

Another message will appear. Provide the token number that is generated onto this thread.

At the bottom of your response, please add "@" and "BillM223" (without the space in between) so that I will be notified of your response.

[jejsblue]

N/A

[BillM223 · Accepted solution]

I see where the $70 in line 18 (form 5329) came from. To fix it, please do the following:

1. Go to Deductions & Credits->Retirement and Investments->Traditional and Roth IRA Contributions and click on Start or Revisit or whatever will get you into this interview.

2. On the entry screen "Traditional IRA and Roth IRA", check that you contributed to BOTH a traditional IRA and a Roth IRA (I know you didn't, but this is how we fix it).

3. You will go through the input screens for the traditional IRA first. Go through them, answering the same way you did the first time.

4. Eventually, you will come to "Roth IRA Contributions" which is the start of the input screens for your Roth IRA. Click YES.

5. Answer NO to the questions about repayment.

6. The next screen will ask about your 2021 Roth IRA contribution. You will not enter anything since you didn't make a 2021 Rota IRA contribution. Just hit CONTINUE.

7. The next screen asks if you want TurboTax to track your Roth IRA basis. Click on NO.

8. The next screen shows that your excess Roth IRA contributions for the prior year was $70. No, I don't know how this got here, but if you enter 0 (zero), the excess goes away.

9. Continue all the way through the rest of this interview. You may have already noticed a slight change in the Refund Meter as the $70 was removed from line 18 (5329) and the $4 penalty was removed from line 25 (5329).

Try it and let me know if this works.

[jejsblue]

Thank you very much for troubleshooting this.

I don't know why I need to check both ROTH and TRADITAIONAL when I only contributed to TRADITIONAL,

and also why $70 was populated as an excess value by default in the first place when ROTH is unchecked.

Your solution does correct the issue. I appreciate your time and effort in resolving this.