I just got my 1099-R form from Vanguard for 2020 and it shows 6000 in Box 1 and 1P in Box 7 which means it is an early distribution before 59 1/2. Box 2b is also checked (taxable amount not determined).
Turbo tax does not include that in my taxable income or calculate any tax on it when i upload the statement. It did not ask me any questions around it. May be because this is about 2019 contribution.
Should I say yes to the question about excess contribution from earlier years? Or should this have been handled as part of 2019 return?
Actually this was my traditional IRA contribution for 2019 and I realized that I am not allowed to do a deductible IRA. I checked with the broker's representative that i may want to convert it to Roth (backdoor) but if could withdraw it then and would it have any impact. She said that she can revert the transaction as I was not eligible for a deductible IRA and therefore i got the money back in my bank account. I had 5.09 of gain on that contribution so that was also paid to me.
How do i report this to the IRS in my 2020 tax return. Do I have to pay early withdrawal tax on the 6000 contribution ? Is 1P the right code if it was a mistake to deposit that money in IRA?
Do i need to fill form 5329 and if yes then would it be for 2020 and would it show the 6000 or just 5.09 and if yes, in which section?
Thanks for your help.
