@Opus 17
Thanks again for all your help. I’d really appreciate a bit more of your advice.
Since it’s been a while, here’s a quick recap: I over-contributed to my Roth IRA in 2021 ($6,000) and again in 2024 ($3,000). Following your suggestion, I amended my tax returns for 2021–2023, paid the 6% penalty on the $6,000 (without earnings), and included Forms 1040-X and 5329.
I had planned to wait for the IRS response before amending my 2024 return, but since I haven’t heard back yet, I decided to move forward with the 2024 amended return before Oct. 15. This way I can avoid the 6% penalty on the 2024 excess contribution. I’ve also already distributed both excess contributions (2021 and 2024).
I now have a few questions about the 2024 amended return:
Q1: On Form 5329, I’ll still owe the 6% penalty from 2021, but I shouldn’t owe a penalty on the 2024 excess contribution since I removed it before the extended deadline. However, on 5329, do I still need to report the 2024 earnings (which are taxable) under Part I: Additional Tax on Early Distributions? From what I see in other posts, Line 1 (Early distributions includible in income) and Line 2 (Early distributions included on line 1 that are not subject to the additional tax) need to be filled out, but I'm not sure.
Q2: If I understand correctly, because the 2024 earnings are taxable, I need to include them in the Form 1040-X Tax Liability section, Line 10 (Other taxes). The total would be the amount TurboTax calculates from the 2024 earnings PLUS the 6% penalty from 2021. Am I thinking about this correctly?
Q3: When filing the amended 2024 return, which forms should I include? I know I need Form 1040-X and Form 5329, but do I also need to include Form 1099-R? If so, should I just need to fill out Line 1 (total amount distributed), Line 2 (earnings), and Line 7 (codes J and P)?
Thank you very much for your guidance!
