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TurboTax calculated a Penalty for over-contributing to a 401k Roth due to income > specified amount. Fidelity says because it was done in a work 401k, TurboTax is wrong.

Fidelity Investments says TurboTax should not have calculated a penalty.  Did I input something incorrectly?
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2 Replies
DanaB27
Expert Alumni

TurboTax calculated a Penalty for over-contributing to a 401k Roth due to income > specified amount. Fidelity says because it was done in a work 401k, TurboTax is wrong.

It seems like you entered your work retirement 401(k) account contributions from your W-2 into the IRA contribution section under Deductions and Credits. A work retirement account is not an IRA. Please follow these steps to remove the entry:

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions” 
  3. Click on “Jump to IRA contributions"
  4. Deselect the IRA and click "continue"
  5. Confirm that you want to delete the entry.

 

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TurboTax calculated a Penalty for over-contributing to a 401k Roth due to income > specified amount. Fidelity says because it was done in a work 401k, TurboTax is wrong.

You only enter a 401K from your W2, nowhere else.  A 401K is not the same as an IRA.  

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