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New Member
posted Feb 9, 2020 6:11:31 PM

I'm 68, I imported my Fidelity forms into Turbo Tax and put in $7000 in my Roth IRA

I get this message saying

 

Excess Contributions Because You Don't Have Enough Earned Income

 

 

0 7 1218
7 Replies
Level 1
Feb 9, 2020 6:16:01 PM

Hello;

 

I just got the same thing.  I am telling them they have a glitch in the software.  I keep getting disconnected, so I was trying to post.  And now I can't believe I saw my very problem here!

 

Did you get a response?  I am disappointed a response is not here...

Level 15
Feb 9, 2020 6:23:50 PM

Did you make a new IRA contribution and enter in into the IRA contribution section?

 

Do you have at least $7,000 of earned compensation (money that you worked for) to make a contribution.

Is your MAGI too high to allow a Roth contribution.

The most you can contribute to all of your traditional and Roth IRAs is the smaller of:

For 2018, $5,500, or $6,500 if you’re age 50 or older by the end of the year; or
your taxable compensation for the year.
For 2019, $6,000, or $7,000 if you’re age 50 or older by the end of the year; or
your taxable compensation for the year.

(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, 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

See this IRS article for Roth contribution limits:

https://www.irs.gov/retirement-plans/roth-iras

 

Level 1
Feb 9, 2020 6:37:48 PM

Thank you for response.  That is textbook answer & I appreciate it.  However, it doesn't answer my question.

 

My earned income on my 2019 W-2 shows $6666, so I should be able to contribute up to that amount without excess.

 

My non-taxable shows $15K, of which $9K went in to traditional 401K.

 

Turbo tax says I can only contribute $6K of the $9K contributed Roth IRA amount & I am in excess of $2665 (difference of these 2).  The 9K is not Roth IRA; it is traditional 401K.

Level 1
Feb 9, 2020 6:39:28 PM

I cannot get thru to these people without them cutting me off.  I am not happy.

Level 15
Feb 9, 2020 7:18:57 PM

@dkahraman56 

 

Your post is somewhat confusing......BUT...it sounds to me like you double-entered your 401k contributions.

 

1) you enter your W-2 in the software W-2 section.....and the 401k contribution of 9k is in box 12, code D on that software W-2 form.  That is the ONLY place you enter your 401k contribution...nowhere else in the tax software.  

 

2)  On the Deductions & Credits page, there is an entry point for indicating contributions to an IRA or ROTH IRA.  That area is NOT where you indicate your 9k of 401k contributions....That area is ONLY for contributions you made separately outside of your employer, to some personal "IRA or Roth IRA" account you own.  Specifically to the two types of "IRAs"...nothing else, not 401k's not 403b's not TSP's ...only to actual IRA/Roth IRA accounts..

Level 1
Feb 9, 2020 7:28:58 PM

@SteamTrain 

 

Thanks for these suggestions.  I will double check.

Level 1
Feb 9, 2020 8:08:39 PM

@SteamTrain 

 

Thanks so much!  You were very clear regarding the Deductions part.  I must have been confused there.  I went back a little more carefully to answer those questions.  I will double check tomorrow, but I now do not show that I contributed excess!

 

Thank you again!