I think I overfunded a SEP IRA, but TurboTax isn't flagging it. If I did, how do I know and how do I file form 5329?

Forum|Forum|1 year ago
February 26, 2025
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dmertz

Employee

Uncorrected excess SEP contributions are reportable on Form 5330, not Form 5329. No version of TurboTax supports Form 5330. The penalty is 10%, not 6%, of the excess amount.

If you enter an excess SEP-IRA contribution into TurboTax under Business Deductions and Credits, TurboTax will inform you that you have made an excess contribution. Any amount contributed to a SEP-IRA beyond the deductible amount (or, in the case of a Roth SEP contribution, the amount that would be deductible if it had been a traditional SEP contribution instead), is an excess contribution if it is not timely corrected.

bick93Author

Obviously I'm going to correct it before the deadline. It's my understanding that moving the excess money out of the SEP generates a 1099-R and I need to file a 5329 with the correction so the IRS knows the distribution isn't taxable and it's correcting an over-contribution. Does anyone know how to do a 5329 on TurboTax? I can't find it anywhere.

As a side note...if you only have SEP contributions it seems to find an over-contribution. But if you mix in more than one self retirement account it gets confused and thinks everything is fine.