How do know if you over contributed to a Roth IRA? (2024)

‎March 20, 20236:48 AM

if you are not careful,

you find out after the fact when the tax software puts a PENALTY on your tax return.

then you have a mess on your hands and have to unwind it.

To be safe, make your Roth contribution for the tax year in the Jan-April timeframe after preparing your tax return.

@ta_nyc

If you have excess contributions to your Roth IRA, TurboTax will notify you if your enter your contributions in TurboTax even if they are not tax deductible.

In TurboTax, you can enter IRA contributions by following these steps:

• In TurboTax, open your tax return
• Click onFederalin the left-hand column, then onDeductions & Creditson top of the screen
• Scroll down to All Tax breaks, locate the sectionRetirement and Investments and click onShow more
• ClickStart nextto Traditional and Roth IRA Contributions.

The IRS can also find out as your Roth IRA custodian will have to issue a form 5498 in the following listing your IRA and Roth IRA contributions. This form 5498 is informational for you but is also filed with the IRS. The IRS may then notify you, sometimes years later.

Please read this TurboTax Help article on form 5409.

Any excess contribution not withdrawn before the due date of your tax return will bear an excise tax of 6%.

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you will be much happier in retirement with your retirement money in a self-directed Roth IRA instead of a Traditional IRA that is taxed and also making your Social Security taxed.

you can use the Backdoor Roth IRA trick to get your money into a Roth IRA if your MAGI locks you out of a direct contribution..

@ta_nyc