Turbo tax what if worksheet

turbo tax what if worksheet

Early Retirement & Financial Independence Community

In summary:

1) I made a dumb mistake on my 2010 Fed Taxes

2) I fixed it on my 2011 taxes according to IRS instructions

3) I’m not quite sure what my IRA Information worksheet is telling me. It’s generated inside Turbo Tax

Details:

1) In 2010 I made an excess contribution to my Roth IRA. It was only $10, but it was excess over my limit. I payed the 6% penalty for the year ($1) and decided I would fix it in 2011.

2) In 2011, I withdrew the $10 and appropriately explained to the fiduciary that it was a removal of the excess contribution from the prior year. I received a proper 1099-R with the correct codes of J and P (removal of excess contribution from prior year). Again I payed the

6% penalty for carrying the excess contribution into the 2nd year.

3) When I printed out my tax forms for review, the $10 amount shows up on the following lines of the IRA Information Worksheet:

Part II Line 6. Basis in Roth IRA Contributions. $10

Part II Line 8. Contribution basis carryover. $10

Part II Line 10. Excess contributions as of 12/31/2010. $10

Part II Line 11. Carryover of excess contributions to 2012. $10

Part VI Line 31. Cumulative regular Roth IRA contributions. $10

My mistake should be resolved, but I don’t know if Turbo Tax agrees.

My questions are:

1) Line 11 seems to indicate that my excess contribution will carryover into 2012, even though Turbo Tax knows I withdrew the excess in 2011 based on the 1099-R. Am I misinterpreting the meaning of line 11?

Source: www.early-retirement.org

Category: Taxes

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