Excess Roth Contribution

Forum|Forum|4 years ago
February 16, 2022
2 replies
4 views

In 2020 I contributed $6,000 to a Roth but then made too much in that year to qualify. I had reported in my 2020 taxes that I removed the funds however the financial institution failed to do so. My plan this year is to use that $6,000 for my 2021 contribution and to submit an amended return for 2020. While creating the amended 2020 return, TurboTax is calculating $720 instead of $360 for the 6% excise tax. Why??

TurboTax Self Employed Online

DanaB27

Employee Tax Expert

It seems that it is calculating the penalty on the double amount. Please go back through the interview of your 2020 tax return and make sure you didn't enter anything on the "Enter Excess Contributions" screen. You will enter the Roth contribution like usually under Deductions and Credits. TurboTax will give you a warning that you have a penalty and you will not enter anything as withdrawn by the due date.

Login to your TurboTax Account
Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
Select “Roth IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution
Enter the Roth contribution amount
On the "Do you have any Excess Roth Contributions" answer "No"
Continue until you get the penalty screen.

On your 2021 tax return, you will answer "Yes" to "Do you have any Excess Roth Contributions" and enter the excess contribution, and then can apply the excess as a 2021 contribution.

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