I filed a 2019 extension & am now doing my taxes.
I am 77 years old & have been contribution to a Roth for over 15 years.
I have been receiving $9,000 taxable alimony for 27 years, which is considered "allowable income" for me to put towards a Roth.
In doing my taxes, I find out that my AGI is $135,781 and I have already put $7000. into an IRA account.
When I try to put $7,000 into a traditional IRA, TurboTax says contributions to those under 70-1/2 years of age & the money I put in is "EXCESS CONTRIBUTION." I never received this message in the past when I put my contribution into a ROTH???? How do I get this to work????
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@kallie25 wrote:
I filed a 2019 extension & am now doing my taxes.
I am 77 years old & have been contribution to a Roth for over 15 years.
I have been receiving $9,000 taxable alimony for 27 years, which is considered "allowable income" for me to put towards a Roth.
In doing my taxes, I find out that my AGI is $135,781 and I have already put $7000. into an IRA account.
When I try to put $7,000 into a traditional IRA, TurboTax says contributions to those under 70-1/2 years of age & the money I put in is "EXCESS CONTRIBUTION." I never received this message in the past when I put my contribution into a ROTH???? How do I get this to work????
The most you can contribute to all of your traditional and Roth IRAs is the smaller of:
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, 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
See this IRS article for Roth contribution limits:
https://www.irs.gov/retirement-plans/roth-iras
"When I try to put $7,000 into a traditional IRA, "
you can't contribute max amount to both traditional and Roth.
Pick one.
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