Hi @DanaB27
Please excuse me tagging you, but I'm following your advice from other posts and just need a little help to finish my filing.
I was following your 12 steps for filing an excess Roth IRA contribution, but my scenario is slightly different and I think I may need to leave the "Corrective distributions made before the due date of the return" blank.
In April 2024 my daughter made an excess contribution to her Roth IRA for tax year 2023 due to contributing more than her income. The excess amount was $1330.89. The earnings were $276.30. Total amount returned by Fidelity in January 2025 (when we realized the error) was $1607.19.
Fidelity said the earnings will be reported as taxable income for the year in which the excess contribution was made. That contribution was made in 2024 for the 2023 tax year. But Fidelity won't send a 1099-R until January 2026.
We are following your recommendation to file now for the 2024 tax year instead of amending a return next year.
For the 1099-R, in boxes 1-16, I manually entered:
Box 1 $1607.19
Box 2a $276.30
Box 7 J-Early distribution from a Roth IRA and P-Return of contribution taxable in 2023
(are these the correct codes I should use?)
All other boxes are empty
I chose 2025 for the year of the 1099-R
(is that correct?)
I don't think I should be entering the $276.30 into "Corrective distributions made before the due date of the return" because this contribution was made in 2024 for tax year 2023, but the excess was not removed until Jan 2025. Shouldn't the due date for this removal have been in 2024 to use this?
If I leave this field blank it says $28 federal tax due
(I think that is a 10% penalty on the earnings)
If I enter the $276.30 into that field it says $0 federal tax due. But I think I am supposed to pay the penalty.
Can you let me know how to file this?
Thanks for your advice!
