ROTH Contributions

[Opus 17]

@SLYKTAX 

did you ever contribute to a traditional pretax IRA? Do you contribute to any workplace retirement plans? Did you ever convert/rollover a workplace retirement plan to a private retirement plan?

If you have only ever contributed to a Roth IRA, then it sounds like you did make some kind of mistake. However, this may be very difficult to diagnose over the Internet just based on the information you have provided.

[SLYKTAX]

I have another question.  I retired in December 2020 suddenly due to offered incentive and I also got paid for my unused vacation and sick times that drive my AGI over my income limit not qualify to contribute full amount to my  ROTH IRA.  I already contributed to 2020 & 2021.  What should I do now? Any exception ? I also had done the Catchup $39,000 contribution to my Deferred Comp.  I work for local government.

[SLYKTAX]

I worked for a local government before I retired in December.  I also max out my contribution and with catch out to my retirement account (457 Deferred Comp) too.   Should I amend my 2019 Tax Return by removing the data on ROTH section since that was funded by after tax money?

[Opus 17]

I’m still not clear what you did.  A Roth IRA is a private account and is covered by different rules and laws than a “Roth” option in a workplace retirement plan even though they are very similar.  If you listed your workplace contributions as if they were also a Roth IRA, that was a mistake, but I don’t know if it would have caused this issue.  

@dmertz perhaps can figure out what is going on here.  

[dmertz]

Sounds like a combination of contributions, rollovers and conversions over several years, but that's about as much as I can tell.

[SLYKTAX]

My wife and I each opened a ROTH IRA account with C. Schwab in 2005 and we contribute the Maximum each year by using personal checks. Yes it is a private individual account.   

TT has tricky questions on the ROTH & Traditional IRA bundled together and I answered I contributed $6,500 each.  In the end, I saw my 2019 tax form (& prior returns) on IRA information worksheets : lines 7 - Basis in IRA Conversions  & Line 9 Conversion basis carryover as of 12/31/2019 filled with the # $6,500;  also Lines 23, 51 & 52 filled with $6,500 on the spouse column.  There were no entry on Line 33 - Regular Roth IRA contribution. Does that # on Line 7 means the $6,500 was funded from another pretax account?  and as a result $6,500 was added to our 2019 our AGI to be taxed? However, in spite of that, my 2019 1040 Line 4a – IRA distribution is blank.   Strange – should it be $6,500 if they is a conversion recorded in 4a?

I just happened to notice this staff when I was doing my 2020 tax return the same way – enter our Roth contribution for the year.  As soon as I entered the $7000, I saw my pending my tax dollars increase right away.  Can I not entering any number on Roth since it is funded with after tax dollars?

I just researched IRS: it said "Contribution to a ROTH IRA is not deductible (and you don't report the contribution on your tax return).  Please advise.  Thanks

[SLYKTAX]

Never mind about the query and confusion I posted earlier as I re-run my 2019 tax again without entering the Roth IRA contribution, I still get the same AGI and Tax I have to pay.  I also found Schwab provided the Form 5498 listing my Roth contribution to IRS, which makes sense I don't have to report on my return. I have several questions that need help.  I go this one first.

My 2019  AGI was  $176,510, $510 more than the threshold  to pay $148.50 Medicare Premium. Now it costs us $59.40 more each  and that translates into $1425/year.  2020 is the first year I have to pay for Medicare Premium because I retired in12/2020 my wife retired 5 years ago.   I made a mistake in 2019 by having my wife withdrew $45,000 from her 401K.   Is there a way, I can still reduce my 2019 AGI by $510: say return $1000 that my wife withdrew from her 401K or donate $520 to charity and then amend my 2019 return?  Your advise will help.

[Taxed user]

I have this same issue.  The employer marked the Roth 401K on the W-2 as "AA-Roth contributions to 401K plan" but Turbo Tax is citing it for excess Roth contributions above $6K.  It seems like it is either a bug in Turbo Tax or in how it was marked in the W-2 (or some other operator error, lol)?  We did not enter a Roth IRA in another location.  Thanks in advance.  

copying this from the prior post too... 

@dmertz do you have any comments?

[dmertz]

A 401(k) is not an IRA.  Enter amounts in shown in box 12 of your W-2 only in box 12 of TurboTax's W-2 form, nowhere else in TurboTax.  Go back and remove the contribution entry you made in the IRS section under Deductions & Credits; yes, you really have one there.  Alternatively, delete the IRA Contribution Worksheet.