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I received a bill today from the IRS trying to collect tax on withdrawal made from a Roth IRA. The withdrawal is from principal and shouldn't have been taxed.
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Retirement tax questions
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Retirement tax questions
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Retirement tax questions
You probably should answer the IRS letter at the address on the letter and attach an amended 2014 tax return properly reporting the 1099-R to a copy of the letter rather than just explaining it.
See this TurboTax FAQ for help with amending:
https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed
Enter a 1099-R here:
Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).
OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.
Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.
One of the follow-up questions will ask about prior year Roth contributions and conversions. Your own contributions will not be taxable. TurboTax will automatically create the 8606 form to show the non-taxable basis that will be part of the amended return. Be sure to attach a copy of the 1009-R.
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Retirement tax questions
I am in this same situation, I submitted an amended return with all the documentation stating that my withdrawal was only what I contributed to the roth. They have had they return for 5 months and keep sending me notices to pay! So stressful, was your issue resolved?
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Retirement tax questions
Did the documentation that you sent include the required Form 8606 Part III for reporting nonqualified Roth IRA distributions? Without that form the IRS must treat a nonqualified Roth IRA distribution as fully taxable.
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Retirement tax questions
I believe so, I had my CPA submit the return and I think I do remember seeing that one. The only forms I had to gather for them myself is 5498s. We called them and they said it was still in the review process but they have had the return for months! The notices are not stopping and getting more and more threatening. I almost want to go ahead and pay it until they figure it out. However, then I do not think I will ever get that money back.
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Retirement tax questions
I suggest contacting the Taxpayer Advocate Service within the IRS if you have not already done so: https://taxpayeradvocate.irs.gov/contact-us