@aeroknight wrote:
When I enter the 1099-R into my 2018 return, @macuser_22 is correct that it adds no taxable income to box 4b even though the distribution (Box 1) is shown in 4a.
I have a couple of follow up questions:
1. Can I safely ignore turbotax's warning that my 2018 return may need to be amended? From what I can tell, even if I did amend the 2018 return based on this 1099-R, the tax owed wouldn't change. The only thing that would change is box 4a on form 1040.
2. This is more a theoretical question because I am curious: If I had any earnings or interest on this excess contribution, I would have to pay tax on the earnings. Since I have a loss, shouldn't the loss be deducted from my earnings of 2018 (or 2019) and reduce my tax bill?
#1) No you cannot ignore the warning because a code 2019 code P does NOTHING when entered into TurboTax 2018 other the to tell you to amend 2018 where the 1099-R is actually entered.
#2) Since there was a loss, then it will not affect your 2018 tax at all (as you found out) and is not worth amending for just to add the 1099-R box 1 amount to the 1040 line 4a to let the IRS know that you have reported it - I doubt the IRS will ever question the missing line 4a amount on your 2018 tax return.
#3) Losses in a IRA are not deductible.
**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.**
