@ DanaB27, your responses were very helpful. However, I have a couple follow-up questions:
My situation is related but not same. AFTER filing my 2020 tax return, I contributed $7000 to 2020 Traditional IRA in April 2021 by mistake. Since it was not beneficial for me to leave it in the IRA (was not tax deductible for me), I had my custodian brokerage firm return the full 2020 contribution out of my IRA later in April. I got a return of $7,161.47 that included earnings of $161.47 while it was in the IRA.
Note, I am over 60 years (and so no 10% early withdrawal penalty), and my withdrawal is NOT a return of EXCESS contribution (mine was within limits). But I am entitled to get the return of my contributions anyway since I did a timely return of monies.
Questions:
- Per DanaB27’s posting, I assume I should account for BOTH the contribution of $7,000 and the return of $7,161.47 in the 2020 tax return?
- Will both parts be accounted for in 2021 forms 5498 and 1099-R respectively from the brokerage firm?
- Can I address in 2022, after I get 2021 forms 5498 and 1099-R, both the contribution and the return parts by amending the 2020 return, or would I need to address my original contribution (or both) before 17 May 2021?
Appreciate a response.
