Here's the situation:
- I made a $7000 max contributions to roth ira and found out I'm not eligible since I didn't have an earned income. (only little dividends)
- I filed for return of excess and got a return.
and here's where I'm confused:
- FreeTaxUSA asks "Did you make any roth ira contributions during 2024: I said yes since I made a contribution in 2025 towards 2024. even though I did a return of excess.
- Enter any roth ira contribution: I entered $7000
- Then it shows "IRA contributions are limited to the earned income on your tax return. You currently have a total of $0 of earned income on your tax return. You have $7,000 of excess Roth IRA contributions. Excess IRA contributions will cause a tax penalty. You can reduce or eliminate the penalty if you withdraw the excess contributions before timely filing your tax return.
- Did you withdraw any Roth IRA contributions by the tax filing due date? Yes/no - Is it correct to say yes? because I'm not sure if I can say that I withdrew it when I did a return of excess?
- Enter any 2024 Roth IRA contributions you withdrew: I said $7000
and here's my question:
Can I enter that I withdrew it when I did a return of excess? Does a "Return of Excess" processed before the tax filing deadline count as a “withdrawal” in this context?
If so, should I answer “Yes” to that question and enter the $7,000 as 2024 Roth IRA contributions withdrawn?
