forms 5329T 5329S

[Lathanna]

Help Why is my client being charge an excess contribution tax if the only contributed the maximum allowable in a IRA, for their ages?

i called proseries and the rep told me it was a glitch in the program  is anybody else experiencing this?

[Just-Lisa-Now-]

Follow the money down the IRA contribution worksheet to you can understand why its an excess. 

There are other factors besides age when determining if an IRA contribution is allowed or in excess.

[rbynaker]

My first thought:  Lack of earned income.

[Lathanna]

Hi, thank you for your input.  I thought that it was from lack of earning also but there are earnings.  Although the taxable income is lower

[Lathanna]

Thank you for your input  There were earnings.  I just spoke with a rep from intuit and there was a showing of excess contribution from 2019 of 7k which we changed to 0 and that corrected the problem.

[rbynaker]

If there was an excess contribution in 2019 was there a corrective distribution?  If not, it counts as a 2020 contribution and the taxpayer continues to pay the penalty each year until it's fixed.  I would not arbitrarily change a carried over number without at least seeing a 1099-R showing the corrective distribution (+ earnings).

[Lathanna]

Thank you, there was no excess contribution in 2019

[Just-Lisa-Now-]

the number carried from somewhere, I think this warrants more investigation.