Excess Roth IRA Contribution Amounts on Form 5329

Submitted by Claire Lee on Fri, 2019-07-19 17:54

Hi all,

I overcontributed to my Roth IRA in 2016. I thought I could contribute $5500, when I could only contribute $4110, which I meant I had an excess of $1390.

In March 2017, I transferred out this amount, plus some (per the advice of a Fidelity rep), and recharacterized $1468 of my Roth IRA as a traditional IRA.

For my 2017 tax return (prepared by TurboTax), I filed an excess of $1468 as excess on my Roth IRA on form 5329, and filed form 8606 on the $1468 amount as well, as a non-deductible contribution to my traditional IRA.

In 2018, when I was completely ineligible to contribute to my Roth IRA, this $1468 amount remained on my form 5329.

2 questions:
1) How come I have an excess amount in my Roth IRA, when I recharacterized this amount as a traditional IRA?
2) How can I go about removing this excess amount, now that I am ineligible to contribute to my Roth IRA so I can’t use it as a future contribution?

Thank you!



Submitted by David Mertz on Fri, 2019-07-19 18:58

  1. Assuming that the recharacterization of your 2016 Roth IRA contribution was done correctly and your 2017 Form 1099-R for the movement of the money from the Roth IRA to the traditional IRA has code R, recharacterizing the $1,390 excess Roth IRA contribution (by a transfer of $1,390 plus attributable earnings) means that you don’t have an excess Roth IRA contribution.  You instead made incorrect entries into your tax-return software that resulted in you filing incorrect 2016, 2017 and 2018 tax returns that need to be amended.  Since this is the result of entry errors you made with the tax-return software, I suggest obtaining help from the tax-return software company to find out how to amend using their software and to find out what entries you should have made (and perhaps entries that you made that you should not have made) that were necessary to produce a correct tax return.  Your 2016 tax return should have included no Form 5329 for an excess contribution and should have included Form 8606 reporting a $1,390 nondeductible traditional IRA contribution (assuming that this traditional IRA contribution was to be nondeductible).  Your 2017 and 2018 tax returns probably should not have included either of these forms.
  2. There is apparently no excess that needs to be removed.


Submitted by Alan - IRA critic on Fri, 2019-07-19 19:26

  • Sound like a combination of errors. If you recharacterized 1390 excess as a TIRA contribution (likely non deductible). There was 78 of earnings on the excess that were transferred to the TIRA. You should have received a 1099R coded R reporting the recharacterization of a 2016 contribution in Jan 2018. That means you had no excess and did not need to file a 5329. What you did should have been included in an explanatory statement with your 2016 return, and not mentioned on your 2017 return.
  • Since you recharacterized the Roth IRA excess contribution, you have no excess and do not need to touch your Roth IRA account. However, you need to amend your 2017 return to eliminate the 5329 and any mention of the 2016 excess. With that 1040X in the explanation box you can make the explanatory statement that should have been done with your 2016 return. Indicate the date, amount, and year of the 2016 excess and the date, amount you recharacterized (1390) as a TIRA contribution and what it was worth when transferred (1468). 


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