dmertz
Level 15

Retirement tax questions

You have Form 5329 to file for 2021, 2022 and 2023 to report the excess $6,000 and pay the 6% excess contribution penalty for each of these years, the total penalty payment being $1,080.  These are to be filed by mail separately from filing your 2024 tax return.  It probably wouldn't hurt to include a Form 1040-X with each of these years showing that there is no change to your taxes for those years other than the penalties.  The Forms 1040-X also provide a place to provide explanation.  Although the examiner should probably accept the Forms 5329 stand-alone (there is a signature block on Form 5329 to allow this form to be filed stand-alone), sometimes they will ask for Form 1040-X.

 

Your 2024 tax return will include on Form 1040 line 4a the $6,000 from the 2024 Form 1099-R and 2024 Form 5329 will show that the distribution eliminates the excess $6,000 carried in from 2023.

 

Nothing else needs to be done with regard to filing.  Just make sure that your Roth IRA contribution basis going forward reflects the reduction in basis resulting from the $6,000 distribution.