Should a 2019 1099-R form, that consists solely of a removal of excess that was done before 2018 taxes were due be filed under my 2019 return or as an amendment to 2018?

[aminhari]

In early April 2019, I discovered I contributed an excess amount to a Roth IRA as I was filing my 2018 taxes. I had this amount + taxable earnings removed from the account PRIOR to filing  my 2018 tax return.  Because this occurred in 2019 technically, it led to a 1099-R form (I have codes "J,P" on this form) for 2019, even though I had it removed before 2018 taxes were due. Note - on my 2018 taxes, I mentioned that a) X amount was contributed to the Roth (line 20) and then b) X amount was was removed (line 26 "Enter any contribution included on line 25 withdrawn before the due date of the tax return"). 

Now my questions are:
- Do I include this form in my 2019 taxes?
- Do I need to amend 2018? If so, how does this work - do I add the same 1099?
- If I do both of the above, doesn't this mean I am paying taxes twice? I did add, remove, then add the 1099-R to my current 2019 to see how it would influence my tax amount due and it looks it doesn't change it (perhaps this is due to the codes in Field 7)?

@dmertz , @macuser_22  - I have seen both of you help others with a similar issue, can you please advise?

[Anonymous]

the code in box 7 should make the return of the excess non-taxable.  yes, you report it in 2019 return.  however, the earnings on the excess was taxable in 2018. 

[aminhari]

Thanks @Anonymous, really appreciate your help as I am truly lost in what to do here. Some clarifying questions:

1) So you believe I should report this as normal in "Wages & Income" for 2019, which by the way, the form already includes the taxable income. Is that right?

2) Therefore, I am confused about your comment regarding 2018 - do I need to make an amendment? What needs to happen there? If I also add the 1099-R form to "Wages & Income" (including values from field 1 and 2a), then I'd be paying tax on the earnings ("taxable amount") twice. Can you please clarify?

[dmertz · Accepted solution]

The amount in box 2a of the code JP 2019 Form 1099-R must be included on your 2018 tax return.  If that amount was not included on line 4b of your 2018 Form 1040, you must amend your 2018 tax return.  You would do this using 2018 TurboTax by entering the code JP 2019 Form 1099-R and in the follow-up indicating that it is a 2019 Form 1099-R.

If the code JP 2019 Form 1099-R does not show any amount of tax withholding, there is no need to enter it into 2019 TurboTax.  If you do enter it, 2019 TurboTax will ignore it other than to remind you over what I said in the paragraph above.

[aminhari]

Awesome, thanks @dmertz !

To confirm my steps here:

a) Amend 2018 tax return by including 2019 1099-R form. Ensure the amount from 2a on the 1099 is on line 4b on the 1040 form.

b) TurboTax will ignore this form if I have code JP and no amount of tax withholding (this is the case for me). Therefore, is there a downside to including it? It feels like including it would at least keep loose ends tidied since it ignores it anyways.

[dmertz]

Just to be clear regarding b), it's 2019 TurboTax that will ignore the code JP 2019 Form 1099-R when it shows no tax withholding.  There is no downside to entering this Form 1099-R into 2019 TurboTax and, as you said, it can help with recordkeeping.