I have been trying to do tax on my own and messed up in 2022 with traditional/roth IRA, and it's still hunting me down. If anyone can help me or provide guidance, I would really appreciate anyone's help...
In Feb 2022, I contributed $6000 to Roth IRA. In April 2022, I realized my income was over the limit and had to take the excessive contributions out (-$608.29).
I don't remember what happened exactly, but I think I realized later that my income was not even eligible for Roth IRA (realized this in Jan 2023), so I had to do backdoor for 2022 tax in 2023. At this point, I already contributed to Roth IRA and took the excessive contribution out. So on January 27th, 2023, I recharacterized $5631.43 to traditional IRA and then Roth conversion on 1/30/2023.
I received 1099-R in 2022 with PJ code in box 7 for distribution code indicated that I overcontributed and took the excessive amount out for 2022 which was reported on Form 5329 as Additional Tax on Excess Contributions to Roth IRAs. For form 8606 in 2022, it reported as I have contributed $6000 on traditional IRA (not sure why it was $6000 instead of $5631??).
For 2023, I contributed $6,500 to Traditional IRA on 6/13/2023 and then did Roth conversion on 12/14/2023.
I just completed my 2023 return and I am a little worried that I didn't file tax correctly for 2022 & 2023 or if I need to amend my 2022 tax return. Received 1099-R (roth) Box 1. $5762.57 Box 2a. $0, Box 7. Distribution Code R. Received 1099-R (traditional) Box 1. $12,411.87 Box 2. $12,411.87 Box 7. Distribution Code 2 IRA/SEP/SIMPLE box checked.
Do these 2023 1099-Rs reflect the change of my recharacterization/Roth conversion from 2022? Do I still need to amend my tax return from 2022? (I think when I was filing 2023 Tax, I think turbo Tax was suggesting me that I might need to amend my 2022 tax return, but not exactly sure what I am supposed to amend since I never got a new form from 2022). Also, my 5329 form for 2023 Tax Return still says $600 as excessive contribution to Roth IRA when I already took out the excessive in 2022 and then recharacterize in 2023. Is this something I won't need to report in 2024 Tax return anymore?
Thank you in advance for your tax expertise!
"I received 1099-R in 2022 with PJ code in box 7"
did you mean to say 2023?
@TaxSoConfusingMang
Since you lost money while it was in there, you don't need to amend.
Negative earnings are ignored. In any case, for purposes of basis, consider the original requested amount as returned.
That's why you entered $6,000
No, I meant 2022 1099-R, Box 7. Distribution Code: PJ. Box 1. $608.29 Box 2a. $8.29
A 2022 1099-R with code P is telling you to amend your 2021 tax return.