Retirement tax questions

The 2023 Form 1099-R with codes P and J for removal of the excess contribution for 2022 will be reported on your 2022 tax return.

If you have the information, then I would recommend creating Form 1099-R to report the withdrawal of excess contribution with a loss. There won’t be any taxable income, but TurboTax will add an explanation statement for the IRS.

If you wait until you receive the Form 1099-R then it isn’t necessary to amend your return since there isn’t a taxable income with a loss and it won’t change your return. All that TurboTax will do is add the explanation statement.

To create a Form 1099-R in your 2022 return please follow the steps below:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2022?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution minus loss)
7. Box 2a enter $0
8. Box 7 enter J and P
9. Click "Continue"
10. On the "Which year on Form 1099-R" screen say that this is a 2023 Form 1099-R.
11. Click "Continue" after all 1099-R are entered and answer all the questions.

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2021" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2022.

@mcarvv