- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Vanguard withheld tax on the earning related to the 2024 excess Roth IRA withdraw, will the tax withheld be applied to 2024's taxes even though they withheld it in 2025?
In early 2024, my daughter contributed 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 4/15/25 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 a comment about Federal withholding, now I am confused about the Federal withholding. Vanguard withheld Federal taxes on the 2024 excess withdrawal earnings, 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 (for tax year 2024) in January of 2026? I want to avoid amending their 2024 return next year. I am assuming if all is correct and the tax withheld is applied to 2024's taxes, we would just put the 2025 1099R 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 Federal taxes Vanguard withheld into the 1099R I created, and then apply those taxes paid to 2025's return in 2026? I know the taxes were withheld on 4/1/25 for the 2024's excess contribution, its on the activity for her Vanguard acct. 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.