Okay so I have the 1099-R's in my 2021 return, even though they're applicable for the 2020 tax year, however I now have a concern:
I'm currently at the stage where I've paid for the TurboTax filing service but have not actually e-filed yet. I was just given the option to see the final forms prepared by TurboTax, which would be e-filed. In these forms, I see 2 forms 5329 attached, each of which mention $6000 as 'excess contributions' in 2020 for my and my wife's Roth IRA accounts. I think *technically* this isn't correct since as per the IRS, if I make excess contribution but then I withdraw it and it's associated earnings before filing taxes for the year in which the contributions were made (2020 in my case), then it would be as if those excess contributions were not made to begin with.
I'm concerned here because this section of the form 5329 says:
"Complete this part if you contributed more to your Roth IRAs for 2021 than is allowable or you had an amount on line 25 of your 2020 Form 5329."
The first statement isn't true since I didn't make any contributions in 2021, and the second won't be true even after my 2020 amended return since the net 2020 contributions would be $6000 (initial excess contribution) - $6000 (withdrawn before filing 2020 tax return) = $0. So I think my 2020 amended return won't even include any form 5329 to begin with - just the earnings would be taxed as normal.
So what should I do about this ? Should I remove these 1099-R's from my 2021 tax return, and/or change anything else ?
Please note that I'll be filing my 2020 return amendment in the next few weeks, which will include these 1099-Rs too in any case.
