@TAXPERPLEXED wrote:
In 2019, I made an IRA contribution. I made too much that year and had to remove it (return of 2019 tax year excess contribution). I removed it in 2020, before filing my 2019 taxes. This year, 2021, I received a 1099-R for the excess contribution (no gain) with codes J and P listed.
My question: I've seen 2 conflicting discussions. 1. One says to amend 2019 taxes and then not report this 1099-R that I received in 2021, which I did; no change to my taxes owed.
2. The other says to create a substitute 1099-R in my 2020 tax return. What does that do? It looks like you only use this if you can't get the 1099-R from your plan administrator.
It seems like this should be fairly simple as I took the 2019 contribution out before filing 2019 taxes. So why am I getting this 1099-R which is listed for 2020. Right now, in TurboTax, I'm paying taxes on it.
Help!!!!
A 1099-R code PJ must be entered in an amended 2019 tax return . The 1099-R box 1 amount is the returned contribution plus earnings (if any). The earnings will be in box 2a (or zero of no earnings or a loss).
Only the box 2a amount is taxable.
Nothing gets entered into 2020.
You do NOT enter a substitute 1099-R (Substitute is ONLY to correct a 1099-R error that the issuer refused to correct) Your 1099-R is correct.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
