topic Re: Bug/text error for IRA excess contribution in Deductions & credits

Bug/text error for IRA excess contribution

Condat — Wed, 11 Feb 2026 06:38:21 GMT

For context, I over contributed $1,000 to my Roth and plan on paying the 6% penalty and have this extra contribution applied to 2024. To keep the math simple, let's say that my end of year balance is $500 for the year the over contribution was made.

1- When I enter the $1,000 contribution amount in the "deduction" section, TT comes back and states with an on-screen dynamic string of text that I have a penalty of 60$, ie $1,000*6%.

2- However, if I go back to 'explain my taxes => other taxes', I do not see a $60 penalty. Instead, I see $30, which implies that the 6% penalty is applied to the closing balance. ($500*6%).

[Updating my own post]: I talked to an online specialist who indicated that the second approach is the correct one. I am leaving this here if others stumble upon the same issue in TT or hear differently.

Re: Bug/text error for IRA excess contribution

DanaB27 — Sun, 10 Mar 2024 11:55:51 GMT

Yes number 2 is correct in your case since you balance was smaller than the excess contribution.

The 6% penalty is calculated by using the smaller of the excess contribution or the value of your Roth IRAs on December 31, 2023 (including 2023 contributions made in 2024). See Form 5329 line 25.

Re: Bug/text error for IRA excess contribution

Condat — Sun, 10 Mar 2024 19:07:12 GMT

Thank you so much for the additional details.