Question

Turbotax says I need to get Deluxe because "You have Additional Tax on Excess Contributions or Deductions (Form 5329)." Why? What does that mean?

Forum|Forum|5 years ago
May 16, 2021
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TurboTax Free Edition Online

If you made IRA contribution but did not have taxable compensation or contributed more than the limit, then you made an excess contribution. Or if yo made a Roth IRA contribution and your Modified Adjusted Gross Income (MAGI) was too high, then you contribution might be limited and result in an excess contribution. Please see 2020 - Amount of Roth IRA Contributions You Can Make for 2020.

To avoid the 6% tax on excess contributions, you must 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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