I contributed $6,500 to a Traditional IRA in September 2024 with after-tax funds and withdrew the exact same amount in December 2024. This should be reported as a ‘return of contribution’, which is non-taxable and not subject to the 10% early withdrawal penalty since no earnings were involved.
However, TurboTax is treating it as a taxable early distribution and applying the 10% penalty. I can’t find an option in the software to correct this. Can you guide me step-by-step on how to properly categorize this transaction in TurboTax so that my taxes are completed correctly?
