@bolinda wrote:
I contributed $7000 for my 2020 Roth IRA and learned in 2021 that my 2020 AGI was too high. I withdrew the $7000 plus earnings and was under the impression I would not have to pay a penalty if I did so before the tax filing deadline. Turbo Tax calculated that I owed the penalty. Is this so? Please advise and thank you.
If you entered the contribution into TurboTax IRA contribution section then revisit that and delete the contribution because you did not make a contribution - it was returned.
You will receive a 2021 1099-R for the return of contribution. If there were any earnings then those will be reported box 2a on the 1099-R and will be taxable in 2020 and probably require amended 2020 to report it.
**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.**
