@MHeslop37 wrote:
Turns out I don't receive a 1099-R for 2023 as I didn't take any distribution out of the ROTH in 2023. I did receive an IRS Form 5498 on 10 May 2024 indicating the $7,500 was put into the ROTH for 2023. Since all the money (both $7500 & $8000) was transferred into the ROTH on 1 April 2024 and removed from the ROTH on 27 Dec 2024 including gains ($836.03). I'm not sure what my next step is, do I make up a 1099-R to file an amendment return for 2023 (& of course pay the 6% fine), what would be the Distribution codes I should use in line 7 of the 1099-R...???
Mike Heslop
For 2023, you must report that you made an ineligible contribution. You will be assessed a 6% penalty. You don't make a fake 1099-R because you did not withdraw anything in 2023, instead you owe a penalty for the excess contribution that was not removed.
You need to do the amended 2023 return first, because you will need information from the 2023 tax return (form 5329) when you prepare your 2024 return.
On your 2024 return, you report the withdrawal and the taxable earnings. That should go on form 5329 and remove the 6% penalty from recurring in 2024 and the future.
