Skip to main content
April 1, 2022
Question

When I enter the ira dep amt for 2021 it raises my tax owed. Also it says we don't qualify, it is more than our earned income. We owe taxes this year

  • April 1, 2022
  • 1 reply
  • 0 views
Our earned income is more than the dep!

1 reply

April 2, 2022

Your IRA contribution limit is the lesser of your earned income or $6,000 ($7,000 if you are over age 50). 

 

If you contributed more than your earned income, you will be assessed an over-contribution penalty of 6% of the amount of overcontribution which will add to your tax unless you withdraw the over-contribution before the due date of the tax return, April 18, 2022. You will continue to be taxed on the over-contribution for every year it remains in your account. 

 

If your earned income is more than your contribution and the contribution is less than $6,000/$7,000, TurboTax may not be recognizing your earned income. Was it reported as self-employment income or on a W-2?