Hi Dana,
Would you be so kind as to answer a few additional questions?
1. Do I need to file form 5329 to report my return of excess, or do I simply skip it since I re-contributed the moneys for 2020?
2. Do I need to add the information from my 1099-R to my income information? My 1099-R states I received gross distributions of $5XXX (censoring myself here) but of course I later re-contributed those moneys for 2020 and never received them as actual income/distributions to my checking account.
And finally, only if you have time, I had some questions unrelated to my IRA problem:
3. Do I need to report bond purchases/sales that generated no gain or loss? To explain: I like to buy bonds and hold them to maturity, and when I do so, I only earn interest on them (there are no capital gains like buying shares of Apple at $80 and selling at $100). Do I need to report these as sales, or can I simply report the interest I earn? The tax program I'm using (HR Block) appears to pull them in as short-term sales with a $0 gain/loss.
4. Related to that question, how do I correctly report bond quantities? Bond purchases are kind of strange in that if I want to buy 2 bonds of $1000 each, they are recorded by my bank in the quantity of 2,000, not 2. This is how it's reported on my 1099-B, and this is also how HR Block pulls the information (ie, a quantity of 2,000 instead of 2). Is this correct? I believe this is how I've reported my bond sales in previous year, but I'm curious what you think.
5. How do I report accrued interest payments? These are payments I make to the original bond holder when I buy their bonds (eg, if I buy a bond halfway through its lifecycle, I pay the bond holder for that "accrued interest" time). It appears HR Block has a reporting field for this (see attachment), but I believe it is actually for accrued interest that I receive, not pay out. Am I required to report accrued interest that I paid out?
6. And finally (sorry!), are you aware of any itemized deductions that can be added on top of the standard deduction? It appears that student loan interest can, but I'm wondering if you know of any others.
Thanks so, so much. If you're pressed for time, please ignore questions 3-6.
