I am seeking clarification on reporting my 2022 Roth IRA contributions and recharacterization to a traditional IRA, as well as the subsequent removal of excess contributions without receiving the related 1099-R forms until next year.
In 2022, I contributed $6,000 to my Roth IRA but later realized that I was not eligible due to high income. In March 2023, I recharacterized $8,341.8 (which includes a Roth contribution of $6,000 for 2022 and earnings of $2,341.8) from my Roth IRA to traditional IRA. I then removed $2,400 from the traditional IRA to avoid excess contributions.
I have the following questions regarding how to report these transactions without the 1099-R forms:
- Should I fill out a 1099-R form or a substitute 1099-R (Form 4852)? I am aware that filing a substitute form might increase the likelihood of an IRS audit.
- Which distribution code should I choose? 8 or P? It seems that 8 is more appropriate since the withdrawal is the return of contribution in 2022.
- The gross distribution is $2,400, of which $2,342.20 is the earnings on contribution. Where should I report the $2,342.20? Should it be entered in "2a-Taxable amount", "3-Capital gain", or both? Also, is the amount in "2a-Taxable amount" $2,400 or $2,342.20?
- I attempted to create a 1099-R form as follows:
1-Gross distribution: 2,400
2a-Taxable amount: 2,342.20
2b-Taxable amount not determined: checked
3-Capital gain: 2,342.20
7-code: P
The IRA/SEP/SIMPLE: checked
However, I did not find any additional 10% penalties on the earnings. I am 48 years old and should be subject to penalties. But the Form 5329 was not triggered after I filled out the 1099-R. Therefore, there is no penalty information on Form 5329 and 1040. How can I report the 10% penalties in Turbotax?
5. If there is a difference between the 1099-R I create for 2022 and the one that comes in 2024, should I amend it next year?
6. If I choose to wait until 2024 to report the removal of excess contribution, should I do anything else except reporting the withdrawal in "Deduction & Credits - Traditional and Roth IRA contribution"? Is there any interest on the delayed taxes and penalties on the earnings of $2,341.8?
7. For the recharacterization, should I fill out a 1099-R form in addition to entering an entry in "Deduction & Credits - Traditional and Roth IRA contribution"?
I would really appreciate if anyone can answer these questions, as the tax filing deadline is approaching.
