So I deleted the amount for "Enter Excess Contributions" like you said, and that took care of the excess contribution for my 2023 tax return. But for your next two parts:
You might want to check your 2022 return, you should not have the 6% penalty calculated on Form 5329 part IV.
If you have the penalty calculated then please amend your 2022 tax return and make sure you enter the excess contribution as withdrawn on the penalty screen:
- Click on "Search" on the top right and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select “Roth IRA”
- Continue until the penalty screen and enter the excess contribution amount withdrawn.
I don't think I even have a Form 5329 for my 2022 tax return. Also on the penalty screen it says "Your Excess Roth IRA Contributions for Prior Years" so shouldn't it go on my 2023 tax return, not my 2022 tax return?
Your 2023 Form 1099-R should have codes P and J for the withdrawal of the 2022 excess contribution plus earnings. This Form 1099-R will have to be entered on your 2022 tax return.
- Click on the "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
- Answer "Yes" to "Did you get a 1099-R in 2023?"
- Enter Form 1099-R and click "Continue"
- On the "Which year on Form 1099-R" screen say that this is a 2023 Form 1099-R.
- Click "Continue" after all 1099-R are entered and answer all the questions.
- Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".
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.
Again, shouldn't this be entered for my 2023 tax return instead of my 2022 tax return, because I received my Form 1099-R in 2023? When I try to amend my 2022 tax return it asks "Did you get a 1099-R in 2022?" which isn't true, I got it in 2023. There is no option to answer "Yes" to "Did you get a 1099-R in 2023?" on my 2022 tax return.
