Help! Excess IRA contribution issue on Form 5329 - carrying over from previous years

This is a common issue with backdoor Roth conversions. When you see an excess contribution carrying forward on Form 5329, it usually means something went wrong in the reporting process rather than the actual contribution process. First, check if you properly reported both the non-deductible contribution to your Traditional IRA on Form 8606 AND the conversion to the Roth IRA. Many people correctly do the transactions but miss reporting one step on their tax forms, which can create this phantom "excess contribution" that carries forward. To fix this, you'll need to amend the return where the error first appeared (looks like 2022 in your case). Once you correct that year's return with the proper reporting, the excess contribution should disappear from subsequent years. You shouldn't have to report it in perpetuity if you fix the original error. And no, you shouldn't be penalized multiple times for the same excess contribution - that would be double taxation. But you do need to correct the original return to stop the carryover.

I had almost this exact same situation last year with my backdoor Roth. Kept getting excess contribution errors even though I was doing the process correctly. After hours of frustration, I used https://taxr.ai to analyze all my documents and found that my brokerage had coded one of my transactions incorrectly which was causing the cascade of errors. The system highlighted exactly where the error occurred in my paperwork and guided me through the correction process. It basically reads your tax documents and finds contradictions or coding errors that humans easily miss. Saved me from having to pay penalties year after year for something that wasn't even my mistake!

I was skeptical at first about using an AI tool for my tax documents, but after getting nowhere with my CPA on my excess IRA contribution issue, I tried https://taxr.ai and was honestly blown away. Uploaded my forms and it immediately identified that my 2022 Form 8606 was missing the non-deductible contribution reporting that was causing the cascade of errors on my 5329. The tool actually showed me the exact lines on each form that were creating the problem and explained how they connected. Was able to file amended returns with the correct information and got my $1,200 in penalties refunded. Definitely recommend for anyone dealing with IRA reporting issues - it's specifically designed to catch these kinds of errors.

If you're trying to resolve this with the IRS, good luck getting through to anyone who can actually help with Form 5329 issues. Tried calling for WEEKS about a similar excess contribution problem. Either couldn't get through or got agents who didn't understand the nuances of IRA contribution limits. Finally used https://claimyr.com to get through to the IRS and they connected me with a real agent in under 45 minutes when I'd been trying for months. You can see how it works here: https://youtu.be/_kiP6q8DX5c. They got me to an agent who specialized in retirement account issues who confirmed I needed to file amended returns for both years to fix the cascade effect.

I need to eat my words. After seeing Claimyr mentioned here, I decided to try it as a last resort for my ongoing IRA mess. Been trying to reach the IRS for MONTHS about excess contributions that kept rolling over year after year. Used the service yesterday and got connected to an IRS agent in about 37 minutes. The agent was able to confirm that I needed to file Form 8606 for the original year AND amend the subsequent years to break the chain of excess contribution penalties. They also put notes in my account about our conversation so there's documentation. Honestly wish I'd known about this earlier - would have saved me over $900 in penalties that kept compounding. Sometimes it's worth paying for help when the alternative is burning hours on hold or paying penalties year after year.

I had this exact problem with my backdoor Roth. The key is Form 8606 - you need to make sure you're properly reporting the non-deductible contribution to the traditional IRA. If you miss that step, the system thinks you've made an excess contribution. Check if you filed Form 8606 for 2022. If not, you need to file an amended return for 2022 with the proper Form 8606, then amend 2023 as well. Once you break the chain, you won't have to keep reporting it. Make sure that on Form 8606: - You report the non-deductible contribution - You properly report the conversion to Roth - You track your basis correctly

I see so many people having problems with backdoor Roths. Is it even worth it anymore? I've been thinking about doing one but these issues make me nervous.

Just went through this exact same nightmare with my 2022-2023 backdoor Roth situation. The cascade effect is real and super frustrating! What helped me was creating a timeline of exactly what happened each year: - 2022: What contributions were made, what conversions happened, what forms were filed - 2023: What excess showed up, what penalties were assessed - Current year: What's carrying forward Once I mapped it out, I could see that I had properly made the non-deductible contribution in 2022 but my tax software didn't generate the Form 8606 correctly. The IRS saw the Roth conversion but not the underlying traditional IRA contribution basis, so they treated the whole conversion as taxable income PLUS flagged it as an excess contribution. The good news is that once you fix the original year (sounds like 2022 for you), the excess contribution issue should resolve. You'll need to amend both 2022 and 2023, but after that you should be clear. Don't let this scare you away from backdoor Roths - they're still worth it, just need to be extra careful with the paperwork!