After you file

Thanks #fanfare, #karenL for great responses. Unfortunately for me at this time, the information regarding "how to" and "when to" file is becoming overwhelming considering my limited knowledge of tax code and my initial hope of a simpler solution of what appeared to be an easy file to pay penalties and any taxes on residual income and move on. But it doesn't appear that is the case due to so many moving parts, including trying to do it with help of TurboTax that I have used since 2010.

Honestly, I don't know how the excess happened and why TurboTax didn't prompt me beyond a pop up that "would you like TurboTax to track your Roth IRA contributions" in 2023 is not clear. But now that is past, and I have to correct the situation, and timing can't be worse as it has caught me at a moment when I can ill afford to pay hefty penalties. 

Regardless, here are the facts of the matter.

1. First excess contribution happened in 2022:  Self - $7000, Spouse -$ 4000 (both removed in April/May 2024 as reg distribution).

2. Second excess contribution occurred in 2023: Self $7000 , spouse $200 (Excess (self) removed - $3500 on April 15, 2024 and 3500 on April 17, 2024; $200 for spouse to be removed in next few days)

3.  I filed my 2023 taxes before April 15, 2024, assuming that gives me until Oct 15, 2024 to remove any excess and/or amend tax returns for 2022 and 2023.

So, my questions are as following (some of these questions may have been answered partially in some way earlier by #fanfare, #karenL and others but I am reiterating the questions so someone else reading may not have to go back to understand my issues. My questions may have too much detail which may cause confusion for some, for which I apologize):

1. Amending 2022 taxes - Since the excess removal was done after tax deadline and I removed just the contributions (no earnings) in 2024, so

(a) am i required to pay anything more than 6% penalty on mine and my wife's excess on 2022 amended taxes?

(b) what forms do I need to use to amend?

(c) Do I need to generate 1099-R to file with 1040X?

(d) How do I do with turbotax if I don't wish to do it manually? Any step by step instructions would be appreciated.

2. Tax year 2023 - Amending 1040 that was filed on time before April 15, 2024, deadline - The removal of excess occurred (one before April 15, 2024) and rest after in April/May 2024 with earnings (separated for 2023 and contributions for 2023 made before April 15, 2024). Unfortunately, my broker removed tax withholdings from my account as well causing too much to be removed which I don't wish not to worry about considering other issues on hand. I intend to file 2023 amended taxes before Oct 15, 2024.

(a) am I required to pay another set of 6% penalties (or any additional penalties) on excess contributions for 2022? If yes what forms are required to be filled to report with 1040X.

(b) What forms do I need to complete to report 2023 excess removal?

(c) Since earnings for 2023 contributions were broken up between 2023 and 2024, Do I need to omit 2024 earnings at this time and use them next year on 2024 tax return or can they be settled in 2023 amended tax return. 

(d)  I am assuming there are no penalties for withdrawal of excess 2023 contributions but there maybe 10% age penalty on earnings on excess contribution. My penalty in this case would be around $5-$10. How and where to report this penalty? Do I need to break this up for penalty on what was earned in 2023 and 2024?

(e) Can someone suggest step by step process to do this with turbotax?

(f) Anything I may have missed

Any feedback and help anyone can provide would be appreciated. 

#ekalbs4  #DanaB27 #fanfare #karenL