401(k)

[jkbtax81]

My wife and I are both retired. I am 67 and she is 60. We contributed $7,000 each to our 401(k) accounts. We received part time income of  $11,000 for me and $38.00 for my wife. We also received $26,000 in 1099 interest and $35,000 in dividends. Why is TurboxTax stating we must remove $2900.00 from my wife's 401(k) account or we will pay a  penalty ?

[Critter]

Because you over contributed ... the max you could put in was the total of the wages for you both.  The investment income doesn't count for an IRA. 

[jkbtax81]

Thank you for your prompt response. I should have stated the contributions were to our IRA accounts, not 401(k) accounts.  I thought that you are allowed to contribute up to $7,000 each to an IRA account even if you did not have any wages ??

[VolvoGirl]

Sorry no.  See, IRS Pub 590-A IRA Contributions

https://www.irs.gov/pub/irs-pdf/p590a.pdf

[jkbtax81]

Thank you.