Thank you for your patience.
So, since tax for the 2017 earnings due to excess Roth contribution has already been paid (withheld) (amount included in calculation of total in line 16 of 2018 1040 matches Box 4 of 1099-R PJ), should I be paying anything with the 1040X for 2017 on account of this earning?
AFAIK, other than the 10% tax, there is no penalty if the entire excess was withdrawn before tax filing deadline for the year.
[Instructions 5329 for 2017 state:
You can withdraw some or all of your excess contributions for 2017 and they will be treated as not having been contributed if (I added #s for clarity):
1. You make the withdrawal by the due date, including extensions, of your 2017 tax return; and
2a.You withdraw any earnings on the withdrawn contributions and
2b. include the earnings in gross income (see the Instructions for Form 8606 for details).
3. Also, if you hadn’t reached age 59 1/2 at the time of the withdrawal, include the earnings as an early distribution on line 1 of Form 5329 for the year in which you report the earnings.]
From the above, 1 and 2a are true. 2b is not true as I did not report any earnings from Roth in 2017 filing. TurboTax for 2018 has NOT included any earnings from the above in the 2018 Form 5329 (I checked the worksheet), though the tax withheld is included on line 16 of 2018 1040). So, 3 is not true (I am not 59 yet).
So, I file the 2017 1040X only to report the earnings (2b above) (via form 5329 for 2017?) and not to pay additional taxes with the amendment?
