Hello @MonikaK1 and thank you for the details.
I have to amend the 2022 anyway for some other things so maybe I can do something regarding this?
For year 2022, my tax liability was the same as my self employment tax in 2022. When I did the return in 2023, the amount of tax owed that it was showing did not change after I opened and added the IRA.
I may have handled the $5,000 incorrectly when I did return last year because I do not have a form
8606 in my files from that year.
Looking at that 2022 return now, on the IRA Contributions worksheet, under Deductible and Non-deductible Traditional IRA Contributions, it shows the $5,000 on line 12 for Deductible contributions and on line 13 for Nondeductible contributions it shows 0.
Then on that same worksheet, at bottom, lines 16 - 18, it states
"Deductible traditional IRA contribution to Schedule 1 (Form 1040),
Line 19: $5,000
Nondeductible Line 18: 0.
Looking for that amt. on the 1040 Schedule 1 and it shows the $5,000 on line 20 (not line 19 which is for alimony) (We have 1040-SR so maybe lines are different.)
On page 2 of the 1040-SR, that amount was part of the total in line 10 adjustments to income and line 11 was less than the line 12 Standard deduction. Taxable income on 15 was 0.
When I called SoFi the phone person told me to list it on the 2023 return as "excess contribution withdrawal" and it wouldn't be taxable. I haven't done 2023 yet so not sure where that option pops up.
Since I have to amend 2022 return anyway, what is best way to proceed to make this cleaner? Should I have listed it as a non-deductible contribution or is that something I had no control over since its listed that way? What should I have done to get that Form 8606 which I don't have?
Thanks so much for your help!
