topic For some reason I am getting a notification that I overpaid into my IRA and owe a penalty although I only contributed 1500, definitely did not overpay. Glitch or what? in Retirement tax questions

For some reason I am getting a notification that I overpaid into my IRA and owe a penalty although I only contributed 1500, definitely did not overpay. Glitch or what?

kyla-lr — Sat, 28 Mar 2020 16:29:49 GMT

Re: For some reason I am getting a notification that I overpaid into my IRA and owe a penalty alt...

ColeenD3 — Sat, 28 Mar 2020 16:50:57 GMT

If you are covered by a pension plan at work, the amount you contribute may be limited. Please see this LINK. For Roth, see here.

Re: For some reason I am getting a notification that I overpaid into my IRA and owe a penalty although I only contributed 1500, definitely did not overpay. Glitch or what?

JR358 — Sat, 28 Mar 2020 16:56:43 GMT

and you need at least that much of EARNED (not investment) income.

Re: For some reason I am getting a notification that I overpaid into my IRA and owe a penalty alt...

dmertz — Sat, 28 Mar 2020 17:16:46 GMT

ColeenD3's answer is incorrect in that being covered by a workplace retirement plan has nothing to do with eligibility to make an IRA contribution. Being covered by a workplace retirement plan can only affect whether or not a traditional IRA contribution is deductible.

In addition to JR358's reply indicating that you must have sufficient compensation to support the IRA contribution, you must not have reached age 70½ or over in 2018. Also, any income excluded under the Foreign Earned Income Exclusion is not compensation that will support an IRA contribution.

Also make sure that you are not mistakenly entering something like a 401(k) contribution as an IRA contribution. Enter amounts shown in box 12 of your W-2 only in box 12 of TurboTax's W-2 form, nowhere else in TurboTax.