Made an excess contribution a few years ago. Properly removed it, have the 1099-R for 2021, and the info on that 1099 is in my 2021 TT taxes. However, the excess contribution tax still continues to linger as if I never took it out and the tax has been on 2022 and now 2023(already filed). I can easily see the 2021 1099 in TT so I'm not sure what went wrong and why it still seems to think I didn't take the excess out and continues to charge the penalty tax. I've verified that the proper distribution codes were also used for that 2021 1099.
What else should I be looking for? Does this require a full amendment for each of those years? Form 5329 is part of my returns but all seem to show the excess contribution amount, but not the distribution.
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@htb14 You need to let the IRS know it was returned or recharacterized. If you did it before the year end or the following year or you converted to a roth.
The year of the excess in TT:
To enter the nondeductible contribution to the traditional IRA:
RETURN OF EXCESS OR CONVERSION year:
To enter the 1099-Rs for the return of excess contribution and the conversion:
Thanks for the suggestions... sorry for taking so long.
I should've also clarified this was an excess Roth contribution, not traditional. Unsure if that really changes the process.
But I went back and looked through previous returns and it seems like everything was already entered and acknowledged.
Regarding "step one" of your reply about entering the excess contribution...
Our 2020 return shows the excess contribution on form 5329 and the 6% tax associated with it.
On the 2021 return on form 5329, it shows the amount on line 18 which is "Excess contributions from 2020"... but then line 20 which is "2021 distributions from Roth" shows $0. But scrolling further through the 2021 return, there is the "1099-R Summary" section which shows the distributions of the excess contribution that also have the proper distribution codes.
And if I go into my TT account and look at 2021, the 1099-R is already entered where it is supposed to be.
So from how I see it, it looks like all appropriate information is there... but it is still suggesting the distribution wasn't taken. What else is missing?
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