MAGI calculation and Roth IRA limits, issue with TubroTax 2018?

[jflaatsch]

I worked through the TurboTax questions for IRA contributions to calculate an IRA deduction. I recharacterized part of my wife's Roth IRA to a deductible traditional IRA to make my modified adjusted gross income below the 2018 married, joint, employer retirement plan, MAGI limit to prevent reducing our Roth IRA contribution limits. Before I finished the IRA contribution questions in TurboTax, it notified me that my Roth IRA has an excess contribution.

After completing the IRA contribution questions and triggering a federal tax review in TurboTax, it correctly reports my MAGI below the income level that causes a Roth IRA contribution limit.  However, TurboTax still says that I must pay a penalty for contributing the full amount, $5500, to my Roth IRA.

Is there an additional limit to Roth IRA contributions other than MAGI? Is there a way to force TurboTax to re-assess the Roth IRA contribution limits after calculating my MAGI? Is there a way to manually correct the forms in TurboTax before I eFile so that I don't have to immediately file a 1040X showing that my MAGI is actually below the limit, allowing a full Roth IRA contribution without penalty?

Thank you for your inputs,
Jonathan

[jflaatsch]

The wording in the IRS documents about modified adjusted gross income is a bit confusing, but the calculation in TurboTax is correct. 

MAGI is almost always more than adjusted gross income, only in a very unusual circumstance could it be less.  Use IRS Publication 590-A, Worksheet 2-1 to calculate MAGI from AGI for the purpose of Roth IRA contribution limits if you have any doubts. 

To add to the confusion there are separate MAGI calculation worksheets, one for Traditional IRA deductions and another for health care taxes.  It takes a bit to work through the fine print and correctly interpret the guidance, but the bottom line is that MAGI will almost always be higher than AGI.  Therefore, an IRA deduction will not 'fix' your MAGI to get below a Roth IRA contribution limit.