Get your taxes done using TurboTax

2020:

No, you should not have a 6% penalty calculated on your 2020 tax return (Form 5329 part IV) since you removed the 2020 excess contribution plus earnings before the extended due date.  Please make sure you enter the excess contribution amount as withdrawn on the penalty screen during the IRA contribution interview. 

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. Continue until the penalty screen and enter the 2020 excess contribution amount withdrawn.

No, you should not have the 10% early withdrawal penalty calculated on the earnings (from box 2a of 2021 Form 1099-R with codes P and J) on your 2020 tax return because you were over 59 1/2. Please make sure you select continue after entering all Form 1099-Rs. Then continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" since you are over 59 1/2. Then TurboTax won't add the 10% early penalty and will enter the exception in part I of Form 5329.

2021:

No, you should not have a 6% penalty calculated on your 2021 tax return (Form 5329 part IV) since you removed the 2021 excess contribution plus earnings before the extended due date.  Please make sure you enter the excess contribution amount as withdrawn on the penalty screen during the IRA contribution interview. Also, delete the entry on the "Enter Excess Contributions" screen when the 2020 excess contribution got carried over incorrectly.

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. On the "Do you have any Excess Roth Contributions" answer "Yes"
5. On the "Enter Excess Contributions" screen delete the entry
6. Continue until the penalty screen and enter the 2021 excess contribution amount withdrawn.

Please make sure you will have to enter the 2022 Form 1099-R with codes P and J on the 2021 return to report the earnings from box 2a.

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Enter the 2022 Form 1099-R with codes P and J 
5. On the "Which year on Form 1099-R" screen say that this is a 2024 Form 1099-R.
6. Click "Continue" after all 1099-R are entered and answer all the questions.
7. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" since you are over 59 1/2.