Question

I contributed some money to a Roth IRA this year. Why does it increase the amount I owe? Didn't I already pay taxes on that money when I first earned it?

Forum|Forum|5 years ago
January 27, 2021
1 reply
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I paid taxes on my income last year. I then decided to put some money into a roth IRA- I know this isn't deductible. However, now I owe even more on my taxes than if I hadn't contributed any money! Aren't I now being taxed twice- first when I made the money, and now when I'm contributing it?

TurboTax Free Edition Online

D

DanaB27

Please be aware that your Roth IRA contribution may be limited based on your filing status and income:

If this applies to you then you can avoid the 6% tax on excess contributions, if you withdraw:

the excess contributions from your IRA by the due date of your individual income tax return (including extensions); and
any income earned on the excess contribution.

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D

dmertz

Employee

As implied by DanaB27's answer, if entering a Roth IRA contribution into TurboTax increases your balance due, it means that it is being treated by TurboTax as an excess contribution. An excess contribution can result from not having sufficient compensation entered into TurboTax to support the contribution, entering a contribution of more than the overall annual limit, or modified AGI for the purpose being above the amount where that amount of Roth contribution is permitted.

Make sure that you are not entering as Roth IRA contributions any amounts shown in box 12 of your W-2. Amounts shown on box 12 of your W-2 are not Roth IRA contributions and are to be entered into TurboTax only in box 12 of TurboTax's W-2 form.