DanaB27
Expert Alumni

Get your taxes done using TurboTax

Cweis: No, you will have to report the withdrawal of the 2021 excess contribution plus earnings on your 2021 tax return. If you do not report it now, then you will have to amend your 2021 tax return when you receive the 2022 Form 1099-R with code J and P next year. But you also will have to enter this Form 1099-R onto your 2022 tax return as well because you had taxes withheld.

 

To summarize, you will enter the Form 1099-R with codes J and P on your 2021 and 2022 tax returns because you had taxes withheld. When you create Form 1099-R for 2021 you don’t have to enter anything in box 4 or box 14 for the tax withholdings since they don’t apply for 2021. When you get Form 1099-R next year you will enter it as shown on your Form into your 2022 tax return. The 2022 code P will not do anything in 2022 tax return, but the withholding will be applied to 2022.

 

If you already had entered the Roth contribution, then just enter on the penalty screen during the IRA contribution interview the excess contribution amount that you removed by the due date.

 

To create a 1099-R to avoid amending your 2021 tax return next year when you get Form 1099-R:

  1. Login to your TurboTax Account 
  2. Click on the "Search" on the top right and type “1099-R”
  3. Click on “Jump to 1099-R”
  4. Answer "Yes" to "Did you get a 1099-R in 2021?"
  5. Select "I'll type it in myself"
  6. Box 1 enter total distribution (contribution plus earning)
  7. Box 2a enter the earnings
  8. Box 7 enter J and P
  9. Leave Box 4 federal tax withheld and Box 14 state tax withheld blank
  10. Click "Continue"
  11. On the "Which year on Form 1099-R" screen say that this is a 2022 1099-R.
  12. Click "Continue" after all 1099-R are entered and answer all the questions.
  13. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount under "Another reason" if you are over 59 1/2 (if you under 59 1/2 click "Continue")

 

@cweis

 

 

@fluxquantum94  If you want to avoid amending your 2021 tax return, then you will create a 1099-R with the steps above to report the withdrawal of excess contributions plus earnings on your 2021 tax return. Only the earnings will be taxable. Also, the earnings can be subject to the 10% early withdrawal penalty if you are under 59 ½.

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