TurboTax is not honoring my removal of a same-year excess Roth IRA contribution before the tax filing deadline

Forum|Forum|1 year ago
March 28, 2025
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In May 2024, I made an $8000 contribution to my Roth IRA. I didn't realize at the time that would be ineligible to contribute. I discovered this fact while doing my 2024 federal taxes in TurboTax.

As prompted by the software, I entered the 2024 contribution amount ($8000) and, a couple of screens later, entered the excess contribution that I had removed from my Roth IRA as of 03/27/2025 (also $8000.)

Unfortunately, TurboTax did not remove the 6% penalty of $480 from my taxes due. I can see the charge in Schedule 2, lines 8 and 21, and Form 1040, line 23. Should I just zero out the two $8000 entries in the TT interface and let it recalculate?

Best answer by fanfare

If you successfully informed TurboTax that you resolved the excess before Tax Day, there would not be a penalty.

Delete your entries and try again.

Just don't report any of this on your tax return.

You can't resolve the excess prior to the tax return due date without the custodian's help. your action generates a 1099-R and can be a problem next year if you do it yourself.

fanfareAnswer

Employee

If you successfully informed TurboTax that you resolved the excess before Tax Day, there would not be a penalty.

Delete your entries and try again.

Just don't report any of this on your tax return.

You can't resolve the excess prior to the tax return due date without the custodian's help. your action generates a 1099-R and can be a problem next year if you do it yourself.

rwhitAuthor

Thank you, Fanfare. The custodian is doing the actual removal for me. Their website required me to create an "Excess Contribution Removal" request on my account, which they should complete by early next week.