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Turbo Tax Q - what is my IRA Information Worksheet telling me?
Old 03-07-2012, 05:15 PM   #1
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Turbo Tax Q - what is my IRA Information Worksheet telling me?

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) Iím not quite sure what my IRA Information worksheet is telling me. Itís 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 donít 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?
2) Does it appear that Turbo Tax will want to ding me again with the 6% penalty when I prepare my 2012 taxes?
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Old 03-07-2012, 05:33 PM   #2
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a 1099r code P for prior year indicates amending the 2010 return.
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