Form 5329 issue

[Rjwinsto]

After filling out my information for 2022, TurboTax claims I overcontributed to a Roth IRA this year.  However, I contributed nothing to a Roth IRA in 2022, and yet I seem to be getting this spurious result. I do have a Roth IRS, but haven’t contributed to it since 2018. I had the same issue happen last year and received a nearly $200 penalty because of it.  Can you help?

[DanaB27]

It might be that you have a prior year's excess contribution carried over. Did you have an excess Roth contribution in prior years? Did you remove it before the due date of that year?

Please go to the IRA contribution interview and check for the carried-over excess. If you had removed the excess in prior years then delete the amount but if you didn't remove it then you will have to pay the 6% penalty as long as the excess stays in the account:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. Continue until the "Enter Excess Contributions" screen and verify if an excess is carried over (delete it if you removed it in prior years)

[HSt]

Without more details it is possible you have previously over contributed and have not rectified the situation.

In that case the penalty could continue.

[Rjwinsto]

I understand that the penalty exists for over-contributing to a Roth IRA.  However, the maximum contribution that I've made to the Roth IRA is $2400 in a single year (starting 2016).  So, I never exceeded the yearly contribution limit.  Yet, turbotax year after year says I have exceeded the contribution limit...which results in a penalty from the IRS. I am unsure what to try to delete this error, but I appreciate any help you might be able to provide.

[MayaD]

You've made an excess contribution  if you contributed more than you're allowed to either IRA or if you contributed to a Roth when you made too much to qualify.

[Rjwinsto]

Thanks for the quick reply, Maya.  That is not the case...we've never exceeded the income limits.  I wonder if this has to do with filing separately from my wife. Am I understanding correctly that this disqualifies the ability to contribute to a Roth?

[AnnetteB6]

Using the Married Filing Separate (MFS) filing status while living with your spouse during the year does not completely disqualify you from contributing to a Roth IRA, but it is severely limited because your Modified Adjusted Gross Income (MAGI) must be less than $10,000 to make a contribution.

Therefore, if your MAGI is greater than $10,000 with the MFS filing status and you entered a Roth contribution, then your entire contribution is considered to be an excess contribution.  

See the following information from the IRS with regard to Roth IRA contributions combined with filing status and income limitations:

Amount of Roth IRA Contributions That You Can Make for 2022

@Rjwinsto 

[Rjwinsto]

Thank you for your help!  I very much appreciate it.