topic TurboTax Roth 401k contribution software error in Get your taxes done using TurboTax

TurboTax Roth 401k contribution software error

Gregor — Sat, 08 Feb 2025 12:58:28 GMT

I have two W-2s with Roth contributions. The two contributions sum to exactly $30,500. The amounts are correctly reported in box 12, code AA of the two W-2s.

But TurboTax says that I have over-contributed to Roth 401k, saying I contributed $30,501.

Maybe the issue is rounding, but I have to sort it out. I cannot ask my employer to correct the contributions, since there is nothing wrong on their end. I cannot fill out the IRS forms to report it, since there is no error. The error is only with TurboTax.

Advice appreciated.

Re: TurboTax Roth 401k contribution software error

ThomasM125 — Sat, 08 Feb 2025 13:57:21 GMT

It is possible, especially if you uploaded the W-2 forms, that they weren't processed properly by TurboTax. I suggest you delete the W-2 entries and re-enter them.

Re: TurboTax Roth 401k contribution software error

dmertz — Sat, 08 Feb 2025 16:12:54 GMT

Yes, TurboTax creates many such errors due to improper handling of rounding. I suspect that both W-2s show contribution amounts of $xxxx.50, resulting in both getting rounded up. You can work around the problem by lowering one amount to $xxxx.49. Otherwise, if TurboTax does not include the "extra" $1 as income on your tax return, you can ignore the message.

Re: TurboTax Roth 401k contribution software error

GregY — Sat, 08 Feb 2025 17:04:23 GMT

I re-entered the W-2 with the same values. That was not the problem, and the error did not get resolved. As I suggested in my original posting, TurboTax handles rounding incorrectly, rounding the Roth contributions on multiple W-2s up when it checks the total annual Roth contributions, resulting in it thinking I have over contributed. This is sloppy accounting and sloppy coding.

Re: TurboTax Roth 401k contribution software error

GregY — Sat, 08 Feb 2025 17:08:26 GMT

Thanks for your thoughtful response. Yes - I came to the same conclusion that TurboTax handles rounding incorrectly. It rounds individual numbers that need to be ultimately added together, setting the stage for incorrect totals. Sloppy and disappointing.