dmertz
Level 15

Retirement tax questions

This appears to be an unfortunate mess of multiple errors because, if you have described the original traditional IRA contributions and Roth conversions correctly, there were no excess Roth IRA contributions that needed correcting because nothing constituted a regular Roth IRA contribution.  Your 2021 tax return should have shown a traditional IRA contribution, probably nondeductible, and a Roth conversion on your Form 8606 and a traditional IRA contribution, probably nondeductible, on your wife's Form 8606.

 

And to be clear, you haven't mentioned anything involving recharacterization.

 

I suspect that the 2021 tax return needs amending because you probably did not report the traditional IRA contributions and your Roth conversion resulting in no 2021 Forms 8606 being filed.

 

Because the traditional IRA contributions and Roth conversions were permissible, it was improper to obtain returns of contribution from the Roth IRAs because there was nothing that constituted a regular contribution to a Roth IRA.  It seems to me that with your 2022 tax return you'll need to file substitute Forms 1099-R in place of the code J8 (maybe code JP in your case) showing the same amounts in box 1 but with a blank box 2a, box 2b Taxable amount not determined marked, and code J in box 7, thus reporting regular Roth IRA distributions, not returns of contributions.  (I assume that you both were under age 59½ at the time of the "corrective" distributions.  For either of you that was over age 59½ you would use code T instead of code J.)  If you did not originally report the code-2 2021 Form 1099-R that you should have received in January 2022, you'll also need to correct your Roth conversion basis in 2022 TurboTax to show the correct amounts for taxable and nontaxable conversions.  You wife's conversion basis will be established in 2022 TurboTax by the entry of the code-2 Form 1099-R.

 

 

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