TurboTax Roth 401k contribution software error

Forum|Forum|1 year ago
February 8, 2025
2 replies
8 views

I have two W-2s with Roth contributions. The two contributions sum to exactly $30,500. The amounts are correctly reported in box 12, code AA of the two W-2s.

But TurboTax says that I have over-contributed to Roth 401k, saying I contributed $30,501.

Maybe the issue is rounding, but I have to sort it out. I cannot ask my employer to correct the contributions, since there is nothing wrong on their end. I cannot fill out the IRS forms to report it, since there is no error. The error is only with TurboTax.

Advice appreciated.

ThomasM125

Level 15

It is possible, especially if you uploaded the W-2 forms, that they weren't processed properly by TurboTax. I suggest you delete the W-2 entries and re-enter them.

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GregYAuthor

Level 4

I re-entered the W-2 with the same values. That was not the problem, and the error did not get resolved. As I suggested in my original posting, TurboTax handles rounding incorrectly, rounding the Roth contributions on multiple W-2s up when it checks the total annual Roth contributions, resulting in it thinking I have over contributed. This is sloppy accounting and sloppy coding.

dmertz

Level 15

Yes, TurboTax creates many such errors due to improper handling of rounding. I suspect that both W-2s show contribution amounts of $xxxx.50, resulting in both getting rounded up. You can work around the problem by lowering one amount to $xxxx.49. Otherwise, if TurboTax does not include the "extra" $1 as income on your tax return, you can ignore the message.

GregYAuthor

Level 4

Thanks for your thoughtful response. Yes - I came to the same conclusion that TurboTax handles rounding incorrectly. It rounds individual numbers that need to be ultimately added together, setting the stage for incorrect totals. Sloppy and disappointing.