@CandP507 wrote:
@ThomasM125 @macuser_22 I called Vanguard. It turned out that I did not correctly remove the excess contribution. The excess contribution was successfully removed today. That is why I never got a 1099-R. Correct me if I'm wrong, but it sounds like I will not be able to resolve this until tax year 2021 and will pay a penalty then. That is fine. It is unclear if I need to amend my 2019 taxes at any point though? Thanks for your help!
Unfortunately it is too late to remove a 2019 excess as a "return of contribution" - that would have to have been done before July 15, 2020.
It can only be removed now as a normal distribution with a box 7 code J. You report that on your 2021 tax return. Since you are removing your own contribution it is not taxable.
HOWEVER;
Since it was an 2019 excess, you need to file a 2019 5329 form reporting the excess ans pay the 6% penalty.
Since the excess was still not removed by the end of 2020, you also must claim the excess on a 2020 5329 form and pay another 6% 2020 penalty.
**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.**
