@ahmadka2 wrote:
Why does it HAVE to be included in the 2020 tax return ? If I receive the 1099-R next year and it is coded properly to indicate that it's relating to removal of excess 2020 contribution, then why can't it just be included with the 2021 tax return ?
Can you give any specifics from an IRS publication to support your claim of needing an amendment as opposed to just including the 1099-R (which is coded properly to indicate that it was for removal of excess contribution) with the next year's return ?
https://www.irs.gov/instructions/i1099r
| P—Excess contributions plus earnings/excess deferrals taxable in 2020. |
See the explanation for Code 8. The IRS suggests that anyone using Code P for the refund of an IRA contribution under section 408(d)(4), including excess Roth IRA contributions, advise payees, at the time the distribution is made, that the earnings are taxable in the year in which the contributions were made. |
1, 2, 4, B, or J |
https://www.irs.gov/publications/p590a#en_US_2020_publink1000230703
Contributions Returned Before Due Date of Return
If you made IRA contributions in 2020, you can withdraw them tax free by the due date of your return. If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. You can do this if, for each contribution you withdraw, both of the following conditions apply.
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You didn’t take a deduction for the contribution.
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You withdraw any interest or other income earned on the contribution. You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. If there was a loss, the net income earned on the contribution may be a negative amount.
Note.
If you timely filed your 2020 tax return without withdrawing a contribution that you made in 2020, you can still have the contribution returned to you within 6 months of the due date of your 2020 tax return, excluding extensions. If you do, file an amended return w
**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.**
