TurboTax error regarding supposed Roth IRA overcontribution

[honem]

My daughter is a student with only self-employment income. She contributed the maximum allowable amt of $7000 to her Roth IRA in 2024, because she earned at least this much from her self-employment business and she falls well under the MAGI limit for a single taxpayer. Yet TurboTax says she over contributed to her Roth IRA and calculates a small increase in her federal tax due (presumably due to a penalty?).

Relevant #'s: Self-employment income=$11,837

                        MAGI=$52,164

Am I missing something? Should she just not enter her Roth contribution into the program this year? (Although this will prevent her from tracking her cumulative Roth contributions with TurboTax)

[VolvoGirl]

Yes she has to enter the ROTH IRA contribution at least to see if she was qualified to make it.   Was the 11,837 self employment income the gross amount she got or the net profit after expenses?

For an IRA contribution.  If you only have self-employment income you can only contribute up to your net profit reduced by the deduction allowed for one-half of your self-employment taxes then only up to the max IRA limit.

See IRS publication 590 http://www.irs.gov/pub/irs-pdf/p590a.pdf

[honem]

Hello, and thanks for responding.

On Schedule C, the net profit after subtracting 1/2 self-employment tax is $9606.

The Roth contribution limit for her age group was $7000 for 2024.

I believe she should be able to fully contribute and I suspect there’s some TT calculation error, but can’t figure out a workaround.

[honem]

I solved my own question by looking at the forms view. She had a small excess contribution from the prior tax year.