Why didn't turbo tax alert me to excess Roth IRA contributions?

[dmertz]

Since TurboTax does provide an indication that you've entered a Roth IRA contribution in excess of the permissible amount, TurboTax not alerting you about an excess Roth IRA contribution implies that you omitted, incorrectly entered or changed some information in your tax return that was necessary to determine that you made an excess Roth IRA contribution.  For example, you might have entered a Roth IRA contribution and subsequently entered additional income that put you over the MAGI limit for making that much of a Roth IRA contribution.  Under these circumstances, unless you revisit the Roth IRA contribution questions you won't see an explicit indication of an excess Roth IRA contribution.  You'll just have Form 5329 appear with the calculation of the excess contribution penalty which you would need to notice when you review your entire tax return before filing.

[k_stout22]

Hi, thanks for the reply. I guess it’s possible something didn’t get entered correctly but I’ve used turbo tax for years and am familiar with it. I use auto populate for all information. My long return shows our contributions and also AGI being in the phase out range due to income limits. When we filed, nothing came up as an alert or anything from turbo tax saying we needed to do anything, such as remove excess contributions. How do I troubleshoot why nothing came up as an alert, if something was entered incorrectly?

[dmertz]

First would be to examine the pdf of your tax return with all worksheets to see that it includes Form 5329 showing the penalty calculation on the excess contribution and your limited Roth IRA contribution determined on the Roth IRA Contribution limit Worksheet (with the excess being the difference between the amount contributed and the limited amount).  Assuming that these are present, you can then open the taxfile for the particular year in that year's version of the CD/download version of TurboTax and step through the Traditional and Roth IRA contribution section to see TurboTax's indication of the excess contribution.

Because the Roth IRA contribution limit is determined only after you have entered all items that go into determining your MAGI and have entered any traditional IRA contribution is TurboTax able to fully determine any excess Roth IRA contribution.  If every section in TurboTax is visited in the prescribed sequence, TurboTax will be able to determine when you first visit the Traditional and Roth IRA contributions section that either you do not have an excess contribution or that you might have an excess contribution, depending on entries in the few remaining sections that follow that can produce additional above-the-line deductions (e.g., alimony paid) that would lower your MAGI.