Hi Dmertz,
You've been so helpful on this informative chain. I just wanted to quickly run by you my situation to ensure I file correctly with Turbotax this year.
- I mistakenly contributed $7k to Roth IRA in December 2024 forgetting the income limit (which rules me out of direct Roth contributions)
- Worked with my bank in February 2025 to remove this excess contribution plus its earnings (i.e., the full $7k initial contribution plus the $130 of earnings made on that contribution)
- I plan to cash both checks (principal and earnings), contribute a non-deductible $7k to my new trad. IRA, and have the bank do the backdoor / convert it to a Roth (which will be counted as my Roth contribution for 2025 tax year given you can't do prior-year backdoors for 2024 after the calendar year ends in December)
It sounds from this chain that after taking these steps (the removal of excess from Roth, and then backdoor to Roth), there won't be any tax documentation immediately provided by my bank that I could use right away in filing now for the 2024 tax year, is that typically correct? Please correct me, but if I would like to solve this mistake during filing this tax season for the 2024 year, it sounds like I must:
- Enter $7,000 as a Roth IRA contribution for 2024 (is this correct to still do even though I removed it?)
- Enter $7,000 as the amount returned to me (even though I technically removed the $130 earnings too as well?)
- Enter a substitute 1099-R manually in my 2024 tax filing
- Enter the $7,130 distribution amount ($7k initial contribution + $130 earnings) in box 1 of the substitute 1099-R
- Enter the $130 earnings in box 2(a)
- What do I enter in box 7 - is it "8" or "J' or "P" or some combination of the three?
- Answer "No, the box is blank"
- Say the Form 1099-R is a 2025 Form 1099-R
- Indicate that the $130 of earnings were "Corrective distributions made before the due date of the return"
- Then, for a year from now when I have the true bank-provided 1099-R, in what ways would I fill out taxes next year if I handle this now by manually generating my own 1099-R ahead of time?
Thank you so very much for your help with this, and I apologize for the longer outreach post, but I'm very grateful for your help!!
