dmertz
Level 15
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"I understand that by using form 8086 I may be able to amend 2022 taxes and designate this as a none deductible contribution"

 

No, that doesn't work.  An excess contribution is already a nondeductible contribution.  If you did not reported the excess contribution on a 2022 Form 5329, you must amend 2022 to include the 2022 Form 5329 and pay the 6% penalty.

 

Assuming that you did not have the compensation in 2023 to be able to apply the excess as part of your contribution for 2023, your 2023 tax return must similarly include 2023 Form 5329 to assess the 6% penalty again for 2023.

 

To correct the excess in 2024, you must take a distribution equal from your traditional IRA equal to the excess with no adjustment for investment gain or loss.  In 2024 TurboTax you'll enter the a Form 1099-R that reports only this distribution and indicate to TurboTax that it's a distribution of the excess by entering on TurboTax's 1099-R form a zero in box 2a instead of the amount shown in box 2a of the Form 1099-R provided by the payer.  TurboTax will then prompt you to prepare an explanation statement regarding the distribution of the excess.

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