Deductions & credits

You will get a Form 1099-R in the following year. The best thing to do is to report the excess contribution distribution in 2023 before you file your tax return. Otherwise, you would have to amend your 2023 return when you get the Form 1099-R in 2024.

To enter a refund of excess IRA contributions in the current year follow these steps:

1. Go to the personal income section of TurboTax 
2. Find the Retirement Plans and Social Security menu option
3. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
4. Choose Add Another 1099-R
5. Choose I'll type it in myself
6. On the screen that says Tell Us Which 1099-R You Have choose I need to prepare a Substitute 1099-R
7. Enter the distribution amount in box 1 of the substitute 1099-R
8. Enter the earnings in box 2(a)
9. Enter code "P" and "J" in box 7
10. When asked about the year on the form 1099-R, say it is for the year following the year you are working on

Follow these additional steps to see if you qualify for removal of the 10% penalty:

1. Click "Continue" after all 1099-R are entered and answer all the questions.
2. Continue until the "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

[Edited 3/6/24 at 1:28 PM PST] @settlersbanjo