Will any TurboTax service help me refile my taxes from two years ago? I made a Roth IRA contribution that I was ineligible for and then withdrew it.

Forum|Forum|1 year ago
May 19, 2024
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This is my first time using TurboTax for my 2023 tax returns. I used to go to an accountant, but he screwed up my 2021 returns by okaying a Roth IRA contribution when I shouldn't have contributed. It was more than a year after the contribution, so I understand I have to refile and pay some sort of penalty.

TurboTax Deluxe Online

xmasbaby0

Employee

The TurboTax "Live" experts do not help with past year returns or amending past year returns. That is simply not a service offered by TurboTax. If you do not feel confident in your ability to amend the return yourself, you should seek some other local tax help.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

fanfare

Employee

There are two ways to handle an excess contribution and the rules are different for each.

If there is only one year to correct (2021)

you are in Case 2

return of excess contribution:

Case 1:
before tax filing date including extension: positive earnings allocable to the excess are included in income on 1040 Line 4b for the year of the contribution. negative earnings are ignored; in any case, for purposes of basis, consider the original requested amount as returned.

You must have a) filed by tax day, or b) requested an extension of time to file by tax day to take advantage of the Oct 15 deadline.

positive earnings removed are no longer penalized 10% if you are under age 59 1/2. (eliminated in 2023)

Case 2:

after tax due date including extensions: you distribute the excess amount being carried forward on 5329,
(or offset it with currently allowed contribution) .
An amended return may be needed supplying that Form 5329 since there is a 6% penalty per year on accumulating excess contributions .
Earnings stay in the Roth account.

Consult your custodian to obtain the correct removal form for each case.

@acchang4