Excess Contribution to a traditional IRA

[Terry64]

My husband and I are filing Married Filing Jointly for 2021 taxes. I am 64 and my husband is 62. I am getting a penalty for excess contribution to my traditional IRA and am not certain it is correct.

1. I have a traditional IRA that I received a 2021 1099-R for a distribution of $10,000.00. I have a 2021 Form 5498, that shows a rollover contribution of $1,124.69 from a work pension, shows the fair market value of the account and shows the IRA Type as "IRA".

2. I have a 401K from company #1 and a 401K from company #2. The total contributed to both 401Ks are my salary deferrals reported on my W2s in box 12d for $7487.00. The 401Ks are separate from my traditional IRA.

3. My MAGI is $139,237.00

4. I think I should be allowed to make a $7000 contribution to the traditional IRA, but made no contribution with the exception of the rollover.

5. I think I should be allowed to make a total of $26,000 contribution to my employer sponsored 401K. Actual contribution was $7487.00

Additional info - my W2s were imported into TurboTax, not hand entered.

TurboTax says that I've made excess contributions to my traditional IRA to the amount of $487.00 and will owe a 6% penalty unless I withdraw that excess. Can you please help me understand why TurboTax thinks I've made a $7487.00 contribution to my traditional IRA when in fact, the contribution was made to my work 401Ks? Am I not understanding this correctly? Thanks!

[dmertz · Accepted solution]

You've mistakenly entered the $7,487 elective deferral to the 401(k) as an IRA contribution.  A 401(k) is not an IRA.  Go back to the IRA contribution section and remove that entry.  Amounts in box 12 of your W-2 are to be entered only in box 12 of TurboTax's W-2 form, nowhere else.

[Terry64]

Thank you so much!!! I found my mistake.