@tdo061803 wrote:
Hi Macuser_22
Thank you so much for your answer. Who would be the account trustee? I have the Roth IRA account at Ameriprise.
"You cannot preform a "return of contributions" yourself." by that you probably mean I shouldn't just transfer money out in order to remove the excess right? I am going to file an Excess Removal Form.
The trustee would be Ameriprise.
No. don't do it yourself or that will be a normal taxable distribution. I assume that this is either a 2019 or 2020 contribution that is still in the IRA and has not been removed yet.
You need to have the trustee do a "return of excess contribution" so that they will generate a 2020 1099-R with a code P in box 7 (if it was a 2019 contribution) or a code 8 (if it was a 2020 contribution). The trustee must calculate the earnings to return and enter those amounts on the 1099-R that you will not receive until Jan 2021.
[If a 2019 contribution returned in 2020 then you will need to either amend 2019 when you receive the 2020 1099-R next year OR when the excess plus earnings is returned to you you can enter it in you 2019 tax return as if you had already received the 2020 1099-R - there is a special way to di that, but you must know the total amount returned and the earnings. That would avoid having to amend 2019 when the 2020 1099-R is received in 2021.]
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
