Thank you for the answer!
I called my IRA trustee and they said that because when I pulled out money (upon realizing that I shouldn't have contributed due to income more than allowed for Roth IRA), I entered the reason code as excess contributions. So, my understanding is that I should report 500$ for 2022 Roth contributions and also report the withdrawl (including earnings) of it using 1099-R form, right? That way TT will not consider whole amount (500$) as taxable but only earnings?
For context, I didn't have Roth IRA account prior to 2022 so my basis is zero. In Jan 2022, I contributed in traditional IRA for 2021 and converted it to Roth IRA immediately.
Timeline:
- Contributed 500$ in Jan 2022 in my Roth IRA. My Roth IRA basis prior to 2022 was zero.
- Removed 500$ + 1$ earnings in Feb 2022
