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Level 1
posted Apr 18, 2022 1:34:22 PM

Trying to carry forward Roth IRA over-contribution, but not sure how to fill out 5329-T forms and pay penalty

I just realized in 2020 my adjusted MAGI put me over my Roth IRA contribution. I have a partial overage that I would like to apply to my 2021 return. 

 

I did not fill out a 5329-T last year and I must have not entered my Roth contribution in TurboTax last year because TurboTax did not warn me that I overcontributed.

 

So, I am now using the 2021 5329-T to apply the excess contribution from 2020 to my 2021 Roth contribution.  I am within the income limits so this is fine.

 

My questions are:

The line 25 on the 5329-T does not calculate a 6% penalty and shows a zero. Is this correct?

Do I need to amend my 2020 tax return to add a 5329-T form there, too??

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1 Best answer
Expert Alumni
Apr 18, 2022 2:36:50 PM

Yes, you will have to amend your 2020 tax return to pay the 6% penalty. Just enter your Roth contribution and TurboTax will create Form 5329 for you. 

 

Yes, if you are able to apply all the excess as a 2021 contribution then you don't have a 6% penalty and line 25 of the 2021 Form 5329 will show $0.

 

  1. Click on "Search" on the top right and type “IRA contributions”
  2. Click on “Jump to IRA contributions"
  3. Select “Roth IRA”
  4. On the "Do you have any Excess Roth Contributions" answer "Yes"
  5. On the "Enter Excess Contributions" screen enter the total excess contribution from 2020 (if it wasn't carried over).
  6. On the "How Much Excess to 2021?" screen enter how much you want to apply to 2021.

 

 

 

1 Replies
Expert Alumni
Apr 18, 2022 2:36:50 PM

Yes, you will have to amend your 2020 tax return to pay the 6% penalty. Just enter your Roth contribution and TurboTax will create Form 5329 for you. 

 

Yes, if you are able to apply all the excess as a 2021 contribution then you don't have a 6% penalty and line 25 of the 2021 Form 5329 will show $0.

 

  1. Click on "Search" on the top right and type “IRA contributions”
  2. Click on “Jump to IRA contributions"
  3. Select “Roth IRA”
  4. On the "Do you have any Excess Roth Contributions" answer "Yes"
  5. On the "Enter Excess Contributions" screen enter the total excess contribution from 2020 (if it wasn't carried over).
  6. On the "How Much Excess to 2021?" screen enter how much you want to apply to 2021.