Roth IRA contribution - excess or not?

[galvindee]

I'm new with Roth IRA so appreciate your help with these simple questions.

Working on "Traditional and Roth IRA Contributions" in the deductions section.  In the Learn More link,  it says it's only for traditional IRA.  But when you actually go into the section, it has option for Roth IRA.  Is it applicable to Roth IRA?

Anyways, I went ahead to see what happens.  For "Enter your regular Roth IRA contributions", I entered the maximum allowed contribution amount which is what I did when I opened my Roth IRA on 15-Apr-2025.  For "Value of Roth IRAs on December 31, 2025", I entered the amount based on my statement which now includes earnings.  TT says I have "Roth excess contributions".  Why?  I never made any additional  contribution.  Does that mean the value (including earnings) of a Roth IRA can only be up to the maximum allowed contribution amount?

[AnnetteB6]

No, that is not what it means by Roth excess contributions.  

Rules for making contributions to Roth IRAs and Traditional IRAs are different.  With a Traditional IRA, you can make a contribution up to the annual contribution limit ($7000 for age 50 and under) no matter what.  The only question with a Traditional IRA is whether you can deduct all or part of the contribution.  The answer to the Traditional IRA being deductible depends on your income (and some other factors) for the year.  

For Roth IRAs, your income is a factor from the start.  If your income is too high to qualify to make the Roth IRA contribution, then you will see messaging onscreen that you have excess contributions.  

That being said, TurboTax should have also calculated the amount of the excess and tell you what your options are to remedy the situation.  

To learn more, take a look at the following TurboTax and IRS resources:

Can you contribute to a Roth IRA?

What if I made an excess Roth IRA contribution because my income is too high?
 

[galvindee]

Thank you for the clarification and education!