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My client is filing Form 2555 Foreign Earned Income and had Roth IRA contribution why is it that our program is computing 6% additional taxes.

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Level 2
 
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Level 15

Was there net earned income? If not, then the ROTH is an excess contribution and subject to penalty until removed.


ex-AllStar
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Level 15

If all foreign earned income was excluded, there is no earned income left upon which to base a ROTH IRA contribution.

Been there and seen that.


ex-AllStar