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Level 1

TurboTax notified me that I shouldn't have contributed to an IRA account. What do I do now?

Situation: I contributed money to my IRA account at the very end of 2017. When I started doing my taxes, TurboTax told me that I wasn't eligible to to contribute to an IRA. I didn't have any earned income but only investment income. I called my financial institute. They reversed the excess contribution and the accrued earnings. They told me that next year, they'll send me a 1099-R.

What should I do in TurboTax this year?

What should I do in TurboTax next year?

Should I and if then how should I report my IRA contribution?

How and in which year do I report the earnings on the contribution?

How and when do I report my reversal of the IRA contribution?

1 Best answer

Accepted Solutions
Level 11

TurboTax notified me that I shouldn't have contributed to an IRA account. What do I do now?

If your financial institute has reversed the excess contribution, then file your return as you normally would without an IRA donation.  Wait and see what the 1099-R has on it next year when it's time to file.  Since none of your IRA contribution was allowable, it need not be reported.  You will report any earnings on an IRA account when it is withdrawn.

1 Reply
Level 11

TurboTax notified me that I shouldn't have contributed to an IRA account. What do I do now?

If your financial institute has reversed the excess contribution, then file your return as you normally would without an IRA donation.  Wait and see what the 1099-R has on it next year when it's time to file.  Since none of your IRA contribution was allowable, it need not be reported.  You will report any earnings on an IRA account when it is withdrawn.