I contributed $7000 to my Roth IRA for yr 2020 with single filling over age 50.
Since I contributed 90% of my income into my 401k and 457 retirement account this year, when I filling return online the system warned me that my adjusted gross income is lower than 7000, I need to withdraw the exceed amount out of my Roth IRA account.
I called my URS retirement, they told me I did not exceed the maximum requirement of $7000, so I do not need to withdraw....suggest me to talk with a real person instead of following the system warning...
Never meet this issue before and people also hardly to see my situation: lower AGI with full contribution of Roth IRA, It would be highly appreciated if can help me figure this out.
@HongminJin wrote:the system warned me that my adjusted gross income is lower than 7000
Are you sure it was saying your AGI was too low, rather than you "taxable compensation" was too low?
After you contributed 90% of your income to retirement accounts, how much was left (the other 10%)? If that was less than $7,000, THAT is why your IRA contribution is limited.
Thanks for your quick response!
I am sure the system says my AGI is too low. After contribution to my retirement accounts, my income only left $ 5800 which is lower than $7000 I contributed into Roth IRA.
So if AGI is too low, the Roth IRA will be limit? Never heard about that...even my retirement system people said they do not know my contribution exceeded maximum.
So that means I have to withdraw $7000-5800 from my Roth IRA account?
Thanks!
As I said before, AGI is not the limit, but your "taxable compensation" is the limit. So yes, you need tell your IRA guy you need to "remove excess contributions" of about $1200.
If you enter $5800 (or whatever the exact amount is) into TurboTax, you will see the error go away.
Thanks for your response!
I went to back the system to check again, it says "you contributed $7000 but your earned income was only $5867, Contributions can't be more than earned income which means you have an excess contribution of $1133"
But I talked with my retirement staff and they also provided me Roth IRA contribution policy https://www.urs.org/documents/byfilename/%7CPublic%20Web%20Documents%7CURS%7CDC%7CIRAs_Guidebook%7C%7Capplication%7Cpdf/ see the page3. we can't figure out why my contribution is considered over limit.
I have been filling with OLT.COM years, today I go back to file with them again and I do not get any warning at all. I only see the system states that a limitation for tradition IRA which I do not even have an account.
I got confused, maybe I should just go back the system I used to and less issues....
Appreciate for your help!