That certainly is further that I had gotten as I wasn't expecting a 2023 / 2024 question after hitting continue. I know that Vanguard will be listing the full amount with both P and J codes.
The J code though assesses a 10% penalty on my earnings but I thought the Secure 2.0 Act of 2022 removed all early withdrawal penalties if contributions were removed before the filing due date.
Page 31 of IRS Pub 590b states:
Withdrawals of contributions by due date. If you withdraw contributions (including any net earnings on the contributions) by the due date of your return for the year in which you made the contribution, the contributions are treated as if you never made them. If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. The withdrawal of contributions is tax free, but you must include the earnings on the contributions in income for the year in which you made the contributions.
TurboTax says the following about the codes, "For Form 1099-R, enter the distribution codes shown in box 7 on the actual Form 1099-R unless you know that the codes are incorrect."
If I leave the J code off then I'm not assessed the penalty, just the taxes on the earnings. What is the downside risk to only listing the P code and not the J code?
@DanaB27
@fanfare
