DanaB27
Expert Alumni

Get your taxes done using TurboTax

Yes, you will only take out a regular distribution of $1,800 and not request to remove an excess contribution for the 2020 excess. You will get a 2022 Form 1099-R with code J (if you are under 59 1/2) and enter it on your 2022 tax return. When TurboTax asks about net contributions in the follow-up questions include the $1,800 in the net contribution amount made since it wasn't removed by the 2020 due date (including extensions).

 

First you will enter the $6,000 contribution amount as withdrawn on the penalty screen:

 

  1. Click on "Search" on the top right and type “IRA contributions”
  2. Click on “Jump to IRA contributions"
  3. Select “Roth IRA
  4. Enter the Roth contribution for 2021
  5. On the "Do you have any Excess Roth Contributions" answer "Yes"
  6. On the "Enter Excess Contributions" screen enter the total excess contribution from 2020 (if it wasn't carried over).
  7. On the penalty screen enter that you removed the $6,000 excess contribution for 2021 (without earnings and losses). TurboTax will only calculate the 6% penalty on the 2020 excess amount.

 

The carryover I was referring to was TurboTax transferring data. If TurboTax didn't transfer that information then you will have to enter the excess contribution amount from 2020 ($1,800) on the "Enter Excess Contributions" screen so TurboTax can calculate the 6% penalty.

 

  But there is a option to apply an excess to the next year if you are allowed to make contributions in that year and haven't entered contributions. The screen "How Much Excess to 2021?" only comes up if can make contributions in 2021.

 

 

 

You will enter the Form 1099-R you got for the removal of $1,800 excess and create Form 1099-R for the removal of the rest of the excess:

 

  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. Enter Form 1099-R with 8J
  5. Select "add a Form 1099-R"when you are on the "Review your 1099-R info" screen
  6. Select "I'll type it in myself"
  7. Box 1 enter total distribution (contribution plus earning)
  8. Box 2a enter the earnings
  9. Box 7 enter J and P
  10. Click "Continue"
  11. On the "Which year on Form 1099-R" screen say that this is a 2022 Form 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 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.

 

 

@fluxquantum94

 

 

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