re-characterization is defined as from roth ira to traditional ira and vice versa. but i also would have had an excess even in a trad. ira. the money was withdrawn and put back into my brokerage account. i don't know how to report this as it is not a re-characterization or is it ?
my email is [removed]
It depends on when and how you withdrew the money.
Was it withdrawn in 2018 or 2019?
Did you specifically ask the IRA custodian for a "return of contributions" and did they return any earnings along with the excess?
Or did you just withdrew the money as a normal distribution on your own?
For a 2019 distribution you will receive a 1099-R next year in 2020.
*IF* you requested a return of contributions due to an excess contribution and the excess was removed before the extended due date of the 2018 tax return and the earnings were also returned and you know that the IRA custodian will report this as a return of contribution and not as a normal Roth distribution - then:
You can just report it now and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or box 12 State withholding. Then you must also enter the 2019 1099-R into the 2019 tax return since the withholding is reported in the year that the tax was withheld. The 2019 code P will not do anything in 2019 but the withholding will be applied to 2019.
You would enter the 1099-R with the total distribution in box 1 (the contribution plus the earnings),
The earnings in box 2a,
Enter code "P" in box 7 (Top) - don t worry that it will say "taxable in 2017 "
Enter code "J" in box 7 (Bottom).
On the "Which year" screen say that this is a 2019 1099-R.
After the 1099-R summary screen press continue.
If you are over 59 1/2 then on the "Lets see if we can lower your tax bill" enter the box 2a amount in the "Another Reason" box to eliminate the 10% early withdrawal penalty on the earnings.
Enter the explanation for the excess contribution and that you are reporting a 2019 1099-R on your 2018 tax return to avoid having to amend in 2019.
The box 2a earnings will be taxable income reported on line 4b on the 1040 form and if under age 59 1/2 will also be subject to a 10% penalty on a 5329 form that will be reported on line 59 on the 1040 Schedule 4 form.
If you prefer to wait until the real 1099-R comes, that is fine, but you will need to amend your 2018 tax retirn and report the real 1099-R exactally the same way.
(Note: if you already filed 2018, then it would be pointless to amend now - just wait for the 1099-R).
Enter a 1099-R here:
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).
OR Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.
Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.
[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]