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Andres808
New Member

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

 
13 Replies
macuser_22
Level 15

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

About the only way a Roth contribution would add to the tax would be if it is an excess contribution.
The IRA contribution interview should tell you the reason.  What does it say?
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Andres808
New Member

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

That is why I think the program is somehow incorrectly calculating my AGI. It gives me no explanation for why it's increasing my tax or why my child tax credit is being cut even though I'm way below the threshold for married filing jointly. Even without the Roth contributions, my tax is not zero, but it is only giving me $189 of my $6,000 child tax credit. I think these two problems are related to a bug with calculation of my AGI. One other person on this forum said they had the same problem but that person did not say whether they were exceeding the AGI limit. I definitely am not.
fanfare
Level 15

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

Turbotax does not give an explanation. Instead it adds Form 5329 to your return with a penalty.
fanfare
Level 15

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

goto List Of Forms and look for Form 5329
macuser_22
Level 15

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

The IRA contribution certainly does tell you if your income is too high, or you do not have enough taxable compensation to contribute or other reasons for applying a penalty.

Your child tax credit is limited to the amount of your tax liability on the 1040 line 11.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Andres808
New Member

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

1400 of the child tax credit is refundable, so I think I should be getting a credit for at least that much even if my tax is zero. Of course, I deleted the Roth contribution but I think that problem is an indicator that there is a bug with my AGI which is also causing a problem with my child tax credit... And that I care about since it could increase the size of my refund. Am I correct that $1,400 of the child tax credit is refundable?
fanfare
Level 15

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

how old is your child ?
macuser_22
Level 15

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

For the child tax credit of $2,000 per child.

The child must have been no older than 16 at the end of 2018.
The amount of child tax credit you can receive is limited by your taxable income (1040 line 10)
If your taxable income is zero, then you are not eligible for any child tax credit.

However, if you do not qualify for the Child Tax Credit, and if your earned income is greater than $2,500, you might be eligible for the Additional Child Tax credit.  That amount is 15% of earned income greater then $2,500 up to a maximum of $1,400.

Too high of an income will reduce or eliminate the CTC also.
    Married Filing Joint - $400,000
    Single,  Head of Household, or Married Filing Separate-- $200,000

The child tax credit will be reported on lone 12a on the 1040 form.  Additional Child tax credit on line 17b on the 1040 form.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Andres808
New Member

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

All the children are 16 or younger. Taxable income is $45k.
macuser_22
Level 15

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

Print all forms and worksheet and look at the Schedule 8812 for the calculations to see the reason.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Andres808
New Member

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

I think I figured out why I'm not getting the Child Tax Credit...even though my AGI is 77k. Most of my income comes from schedule SE this year. I guess that's not earned income. I still can't figure out the Roth issue.
macuser_22
Level 15

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

I would assume the same thing.   Only net SE income minus the deductible part of the SE tax is compensation.

The most you can contribute to all of your traditional and Roth IRAs is the smaller of:

    For 2018, $5,500, or $6,500 if you’re age 50 or older by the end of the year; or
    your taxable compensation for the year.
    For 2019, $6,000, or $7,000 if you’re age 50 or older by the end of the year; or
    your taxable compensation for the year.

    (Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, alimony and separate maintenance, and nontaxable combat pay ).  

See this IRS article for Roth contribution limits:

<a rel="nofollow" target="_blank" href="https://www.irs.gov/retirement-plans/roth-iras">https://www.irs.gov/retirement-plans/roth-iras</a>
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
fanfare
Level 15

Why is it increasing my tax owed when I put $$ in a Roth IRA (mfj AGI is $77k). Also cutting child tax credit from $6k to $189. It seems like a bug with my AGI. Ideas?

If you are eligible for a Roth IRA contribution, you don't have to tell TurboTax about it.
Go back and undo that part.

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