Retirement tax questions


@Confusedtax12345 wrote:

@macuser_22 

I'm in a similar situation. Made a roth contribytion for 2020 in January 2021. It was an excess contribution. I withdrew it and gain. Do I report it in 2021 or 2020?

I found this online: https://www.wolterskluwer.com/en/expert-insights/ira-reporting-excess-contributions-and-recharacteri...

It says report in 2021 is this wrong?

Thank you!


That article does not say to report it in 2021 - it says: If a contribution is made during one calendar year but removed in the following calendar year (before the tax-filing deadline, including extensions), report using Code P.    And code P on a 2021 1099-R means "taxable in 2020".       (A Roth will have code JP - J meaning Roth).

 

If a 2020 contribution returned in 2021 as a "return of contribution and earnings" then it will be reported to you on a 2021 1099-R box 7 code PJ that means taxable in 2020.  It would be entered on your amended 2020 tax return when you receive the 1099-R next January.

 

Entering a 2021 code JP in the 2021 TurboTax will tell you to amend 2020.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**