Turbo Tax states that my 2018 $6500 IRA contributi...
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Returning Member

Turbo Tax states that my 2018 $6500 IRA contribution will result in a penalty. I am 50+

Before increasing my contribution for 2018 I checked the IRS guidelines and it stated that $6500 was the max based on 50+ years of age.  Why is it subject to a penalty?

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Level 15

Turbo Tax states that my 2018 $6500 IRA contribution will result in a penalty. I am 50+

2018?

 

$6,500 *OR* your taxable compensation, whichever is *lower*.

 

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

 

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

 

Roth IRA contributions can be reduced or eliminated entirely if your MAGI is too high

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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Level 15

Turbo Tax states that my 2018 $6500 IRA contribution will result in a penalty. I am 50+

2018?

@Sunroper Your post shows you are using the TurboTax online editions.  TurboTax online editions can only be used for a 2019 tax return. 

If you need to complete and file a 2018 tax return you would need to purchase and download one of the 2018 desktop editions from this TurboTax website - https://turbotax.intuit.com/personal-taxes/past-years-products/

 

An IRA contribution for 2018 had to be made on or before April 15, 2019.

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Returning Member

Turbo Tax states that my 2018 $6500 IRA contribution will result in a penalty. I am 50+

My apology.  First time reaching out to community.  

 

I purchased the 2018 Turbo Tax.  

 

My contribution was made timely.  I am 50+ and retired.  I reviewed the IRS guidelines prior to making contribution but it states that I have made an excess contribution to my IRA.  I simply do not understand.

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Returning Member

Turbo Tax states that my 2018 $6500 IRA contribution will result in a penalty. I am 50+

Thank you.

 

I will research MAGI.

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Level 15

Turbo Tax states that my 2018 $6500 IRA contribution will result in a penalty. I am 50+

TurboTax tells you the reason in the IRA contribution interview at the end - what does it say?

 

What type of IRA, Roth or Traditional?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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Returning Member

Turbo Tax states that my 2018 $6500 IRA contribution will result in a penalty. I am 50+

Still working on the return.  Got hung up on the IRA.  Will attempt to complete the entry and will see what the interview at the end reports.

 

Thank you for your input.

 

Greatly appreciated!

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Level 15

Turbo Tax states that my 2018 $6500 IRA contribution will result in a penalty. I am 50+


@Sunroper wrote:

Thank you.

 

I will research MAGI.


Also, if a Roth, is your filing status Married Filing Separately?      If yes and you lived with your spouse anytime in 2018 the MAGI limit under $10,000 or you cannot contribute.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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