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Roth IRA Excess Contribution 2021

Forum|Forum|4 years ago
March 11, 2022
2 replies
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Why am I being taxed on excess contribution of 6,250? AGI is below phase out levels. I'm over 50. Self-employment income after 1/2 self employment tax is 6,296. The Keogh, SEP and Simple contribution worksheet shows 6,250 contribution to 401k (line 6) that I did not make.

Best answer by dmertz

@wittersb , you were apparently experimenting with reporting a 401(k) contribution. To remove that entry, indicate that you made contributions to an individual 401(k) allowing TurboTax to present the page where you made the erroneous entry, then remove this entry. Alternatively, delete the entire Keogh, SEP and SIMPLE Contribution Worksheet and revisit the Self-employed Retirement section to redo your SEP entry.

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GeorgeM777

Because Roth IRA contribution amounts are limited to your earned income, if your return reflects a $6,250 contribution to a 401k, then your Roth IRA contribution would exceed your earned income and thus would be an excess contribution and subject to penalty.

Because you were able to review the Contribution Worksheet, we assume you are using TurboTax CD/download for Business. To delete your 401k entry, follow these steps:

Go to Business, then Business Income and Expenses
Scroll down the page to Less Common Business Situations
Select Self Employed Retirement. Review your entries and delete what is not necessary.

@wittersb

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wittersbAuthor

used "deluxe" but found location to make correction

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dmertzAnswer

Employee

@wittersb , you were apparently experimenting with reporting a 401(k) contribution. To remove that entry, indicate that you made contributions to an individual 401(k) allowing TurboTax to present the page where you made the erroneous entry, then remove this entry. Alternatively, delete the entire Keogh, SEP and SIMPLE Contribution Worksheet and revisit the Self-employed Retirement section to redo your SEP entry.