Reporting excess Roth IRA earnings

[shelleyfl59]

I removed my excess Roth contributions prior to filing my extension on April 17th. I will not get the 1099R from Vanguard until 2025. Would it better to file an extension in 2025 to report the 1099 or is there a way to report it before filing my final 2023 return this year? Someone suggested a dummy 1099R, but I feel a little uncomfortable with that in case it doesn't match the one I get next year. Is it a big deal to file an amended return?  Thanks so much.

[Katie-P]

Hi @shelleyfl59,

Thanks for your question. I'm happy to help!

In 2024, you took out the excess Roth contributions you had made for tax year 2023. Since you took the money out in 2024, it is considered a 2024 distribution (not a 2023 distribution). Next year, you'll get a 1099-R from Vanguard for tax year 2024, and you'll enter that form on your 2024 tax return. 

There is no need to enter a dummy 1099-R for tax year 2023. After you indicate in TurboTax that you made a Roth contribution for 2023, you'll see messaging indicating whether or not your income was too high to make the Roth IRA contribution. TurboTax will ask you how much you withdrew by the due date of your return. Once you enter in that amount, you're done. There's nothing more that you need to do for tax year 2023 in terms of the Roth excess contributions.

There should not be a need to file an amended return if you follow this guidance. 

I hope this helps! I'll keep an eye on your post in case you have any follow-up questions. Thanks so much for participating in today's event!