So, we received a 1099-R form for 2021 and for the box 7, it has a code 8.
We search online and it said it is a return of excess contribution.
For box 2a - taxable amount is $0.
The story is we believed that our income has exceed the traditional IRA contribution limit for 2020 and 2021.
But we opened a traditional IRA in 2020 by mistake, and contributed $2200 to the account (with after tax money) and contributed another $1000 to the account in 2021. (same with after tax money)
We have total contributed $3200 to the traditional IRA and we closed it early 2021 with a gross distribution $3,462.
Now we are doing our tax, and not sure how do we report the contribution and distribution. Since $3200 is contributed with after tax money, do we just report $262 income for 2021? (plus 10% early withdrawal penalty as we are under 59 years?)
And what kind of forms will be used for reporting?
Thanks.
