Mystery Roth Penalty

[Dictionary Time]

Hi, I am using Credit Karma for my taxes and they are saying that I owe a $60 penalty for excess Roth contributions.

I don't know why they're excessive.  I put in $7K that Vanguard said was OK.  We are under the $193K MFJ limit.  He is over 50 so I thought it was fine.  Maybe because he is covered by a work plan?

Should I pay the $60 or can I back out the extra somehow?

I don't want to go in and take money out, it's so depressing to even log in to Vanguard at this point TBH.  Losing $60 on top though is adding insult to injury.

Or is this an error because the software doesn't realize he's over 50?

Any insight appreciated!

[terran]

I put in $7K that Vanguard said was OK.

Did you put $7k in your Roth IRA or did he put $7k in his Roth IRA? IRAs are individual accounts, so if he's over 50 but you're not then he can make an extra $1000 catchup contribution, but you can't.

If it went in his Roth then I agree that you haven't made an excess contribution as long as you're filing married filing jointly and your Modified AGI is under $193k. Make sure it's entered as his IRA in credit karma, and make sure he DOB is entered.

[phildonnia]

The $60 figure means that it thinks you're overcontributed by exactly $1000.  Since that's the amount of the catch-up contribution, there's a likely explanation:  in it's little brain, it doesn't know about the catch-up contribution limit or that you qualify.

Make sure that you've entered your birthdate at some point, as it will use this to check your age.

That said, there are occasionally bugs in tax software!