DanaB27
Expert Alumni

Get your taxes done using TurboTax

No, you will not pay the penalty since you did not have any earnings. Please be aware, only the earnings will be taxable and subject to the 10% early withdrawal penalty (if you are under 59 ½).

 

Please follow these steps to create your husband’s Form 1099-R who had earnings:

  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. Click "Continue"
  10. On the "Which year on Form 1099-R" screen say that this is a 2022 1099-R.
  11. Click "Continue" after all 1099-R are entered and answer all the questions.
  12. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" if you are over 59 1/2 (if you are under 59 1/2 click "Continue") 

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2020" you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2021.

 

 

Please follow these steps to create your Form 1099-R with a loss:

  1. Click on the "Search" on the top right and type “1099-R”
  2. Click on “Jump to 1099-R”
  3. Answer "Yes" to "Did you get a 1099-R in 2021?"
  4. Select "I'll type it in myself"
  5. Box 1 enter total distribution (contribution minus loss)
  6. Box 2a enter $0
  7. Box 7 enter J and P
  8. Click "Continue"
  9. On the "Which year on Form 1099-R" screen say that this is a 2022 1099-R.
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