Turbotax says my IRA contribution is too high

Forum|Forum|1 year ago
September 16, 2024
3 replies
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I am over age 50 and contributed $7000 to my Roth IRA in 2022 for 2023. Turns out my income was too high so I had to recharacterize it as a traditional IRA contribution for 2023. The amount recharacterized was $7300 due to investment gains. IRS has revised the max contribution for 2023 to $7500 for those above 50. However, Turbotax tells me I cannot contribute more than $7000 and that the remaining $300 is an excess contribution. How do I fix this in Turbotax?

Best answer by dmertz

"I am over age 50 and contributed $7000 to my Roth IRA in 2022 for 2023."

That doesn't make any sense. One is not permitted to make a contribution for a future year. I'll assume that this is a typo and you properly made a $7,000 Roth IRA contribution for 2023.

You recharacterized $7,000, not $7,300. $7,300 was the gain-adjusted amount transferred, not the amount recharacterized.

dmertzAnswer

Employee

"I am over age 50 and contributed $7000 to my Roth IRA in 2022 for 2023."

That doesn't make any sense. One is not permitted to make a contribution for a future year. I'll assume that this is a typo and you properly made a $7,000 Roth IRA contribution for 2023.

You recharacterized $7,000, not $7,300. $7,300 was the gain-adjusted amount transferred, not the amount recharacterized.

Mike9241

only recharacterize the amount contributed exclude the earnings

sekrishnanAuthor

My earlier post was incorrect so I am correcting the record and asking a slightly different question. I had contributed $7000 to a Roth IRA in 2022 but on preparing my taxes in 2023, found out my income was over the Roth limit and recharacterized the $7000 plus earnings (300) to a traditional IRA. I reported it on my 2022 tax. However, my brokerage firm did not issue any new tax forms for 2022 and instead issued a Form 5498 and 1099-R which showed the amounts as a contribution for 2023 - when I questioned this, they pointed out that the code number for the contribution shows that it was a recharacterization done in 2023 which applied to 2022 tax year. My question is how to make this clear to the IRS? Do I need to provide an explanatory statement? I don't see a way to add a statement to a Turbotax efiling or a way to upload these two relevant forms. Any suggestions?