I recently learned I incorrectly deducted contributions to a Traditional IRA in 2019 and 2020. I no longer have earned income so my understanding is that I will need to amend those 2 years to pay the additional income tax plus the penalty computed on form 5329. My question is - how the earnings treated? For example, for the 2019 contribution, do all the earnings (through date of correction) get included on the 2019 return? Or will there be earnings for 2019, 2020 and even 2021 related to the 2019 contribution? Do I have to wait to receive the 1099 from the investment firm to amend? Thanks. I am confused about the process as I can't find an example anywhere based on my unusual circumstances. By the way, even though my income was properly coded as deferred compensation on my W-2 in 2019 and 2020, Turbo Tax incorrectly allowed the deduction. In 2021, Turbo Tax properly determined that deferred compensation is not earned income.
