Question

How do I tell Turbotax which person is correcting an excess IRA contribution? It say my spouse must do it, but my contribution has the problem.

Forum|Forum|4 years ago
March 3, 2022
2 replies
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Both of us are over 50. My spouse contributed her limit of $7,000. I contributed $6,693. We went $130 over our jiny earned income. I removed the excess from my contribution. But Turbotax insists that my spouse is the problem and that she must remove it. It doesn't allow me to enter my removal.

TurboTax Online

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GeorgeM777

Because it appears you are filing a joint return, you need to select the IRA account that is being modified. Go back to the Deductions & Credits section and scroll down the page to Retirement and Investments. After clicking Start/Revisit, you should see a page where you and your spouse are listed, and you can make selections regarding the type of retirement account at issue, which in this case is an IRA. As you continue through the application, you should see a page where you can identify the amount of the contribution that needs to be recharacterized. Recharacterization refers to a situation where a taxpayer has contributed too much to an IRA and needs to remove the excess.

The page you are looking for will be the one below or a similar looking page. This is where you will designate which IRA contribution amount is being recharacterized.

@MarkL2

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M

Mark L2Author

George,

Thanks for the response, but I'm not doing a recharacterization. I'm not switching money from my Roth to my traditional. Turbotax told me we had contributed $130 more than we had in earned income, so I needed to remove the excess contribution. I did that from my Roth IRA account, and am trying to enter that into Turbotax. But Turbotax insists that I need to do that from my wife's Roth IRA. That's not correct, I have my choice. We did not exceed the maximum allowed contribution on either IRA ($7000) , we exceeded the total earned income. I started at the page you posted. Eventually, I got to the page immediately below. Notice the order assumed in the screenshot - it would have been equally correct to switch our names. When I went to the next page (2nd picture below), I found that Turbotax requires that I take it from Peggy's account and did not ask which account was corrected.

How do I work this?

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GeorgeM777

TurboTax will work from the first taxpayer that has been entered. In other words, if you started entering IRA information about yourself first, TurboTax will calculate that your IRA contribution is compliant and thus no amount needs to be withdrawn. Thereafter, when entering the IRA information for your spouse (the second taxpayer), TurboTax calculated that your spouse's Roth IRA contribution exceeded the allowable limit given your earned income.

Thus, reverse the order when entering the IRA information. Start with your spouse's IRA information, then enter your own. That should result in a page similar to what you are seeing now, but instead of your spouse's Roth IRA contribution being too much, it will be your own that exceeds the maximum allowed and thus, you will be prompted to remove the excess.

@Mark L2

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