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Get your taxes done using TurboTax
My daughter contributed in 2024 to her Roth Ira only to find out after getting married they made too much so she withdrew the contribution and the earnings in 2025 before the deadline. I understand the explanation to create the 1099R using the codes P & J, and indicating this will be a 1099R for 2025. I did that and thought all was good, until I read your comment about Federal withholding, now I am confused about the Federal withholding. Vanguard withheld taxes on the 2024 excess withdrawal, I can see it on her activity, so do I still enter the taxes withheld in box 4 of the 1099R I created for 2025 on her 2024 tax return. I am assuming I would, but will the taxes Vanguard withheld apply to the 2024 return since they were collected 4/1/2025? If so, including the taxes withheld on the 1099R I created, will all be good when she gets the actual 2025 1099R in January of 2026? I want to avoid amending their 2024 return next year. We would just put the 2025 1099 she gets next year aside and not enter it into 2025's tax return? We do not pay state taxes so she has one less thing to worry about. OR should I not enter the taxes in the 1099R I created, I know were withheld on 4/1/25 for the 2024's excess contribution, and then apply those taxes paid to 2025's return in 2026? I am hoping you say the taxes Vanguard withheld on 4/1/25 will be applied to 2024's return and there will be nothing to do on 2025's return. Thank you.