"Again you repeat all the questions about 2023 that I answered for you in detail above."
"you are still confused about the Oct deadline for removing excess (it doesn't impact you) and the deadline for amending (there isn't any October deadline)."
You are correct on both accounts. Maybe the reason is that I am not used to details regarding taxes and this is first time dealing with such situation. Further, it could also be that I am hoping too much by expecting logical step by step instructions and exact forms I have to fill for each step for 2023 and 2024, like the following below that you had provided for 2022 in your earlier post. It was clear and concise for someone like me and I am grateful to you for being patient with me.
"If you are paying a penalty then amounts are changing and you have to adjust your tax.
The new or changed forms would be
Form 5329
Schedule 2 Line 8
The penalty goes on 1040-X Line 10.
Do not include your old 1040 nor your revised 1040 because the Form 1040-X reflects any changes there and becomes your new tax return.
Done this way, you sign 1040-X, not 5329."
So, at this point I am very clear on what I need to do for 2022 and I am going to start the process to amend 2022 tax return and pay penalties by end of this week.
However, confusion starts with tax return for 2023 as I am unable to put together logical steps to undergo and complete the process. I am clear that I have to pay 6% for calendar year 2023 also but how to combine that with withdrawals for 2023 and when is the best time to file, so as not to incur any more penalties and issues, is what is the source of my confusion.
Based on my earlier understanding, I was planning on amending 2023 return before Oct 15, 2024 for two reasons:
(a) considering that part of the contributions/earnings were removed just before and shortly after filing my 2023 return on April 15, 2023 and the way I understood from earlier conversations and reading IRS manuals that I must amend 2023 return before oct 15, 2023 to account for contributions removed after April 15, 2023 (but before Oct 15, 2023) and not be penalized. However, from your recent post it appears that it is not the case, and 2023 tax return can be amended next year after I receive 1099-R's for the distribution. I hope what I understood is correct.
(b) Biggest source of my confusion was that all 2023 contributions/earnings removed will be reported as distributions for 2024 (on 2024 1099-R's) and would need to be reported on 2024 1040 lines 4a & 4b. They don't have any direct bearing on 2023 tax return. Correct? So for 2023 tax, amendment just needs to report withdrawals (on 5329's for me and my wife in section III??), and any age penalty on earnings withdrawn (at this time there is none). So, your suggestion that I should wait until next year to do so, is it just to make sure that they go with the codes on 1099-R? I don't have any issue either way, filing it next year or this year as I had originally planned but just want to make sure that I am not adding additional issues or penalties by doing so.
Maybe it is asking too much but I will appreciate it and it will be help immensely if you can breakdown the easy steps/forms to file with timing for 2023 amendment and any extras for 2024, the way you broke it down for 2022 above. Thanks
#fanfare
