dmertz
Level 15

Retirement tax questions

To be more specific, the distribution must be made as a "return of contribution" with the amount distributed being the amount returned adjusted for investment gain or loss, not a regular distribution.  (The rate of gain or loss is determined over *all* of the investments in the IRA account, the entire account balance.)  If done before the end of 2019 it will be coded with code 8 (along with code 1 of you are under age 59½ at the time of the distribution.

If the the IRA gained value while the $4,000 was in the account, the gains distributed will be taxable.  If you are under age 59½ at the time of the return of contribution, the taxable gains will be subject to a 10% early-distribution penalty.

There is still more than half a year left in 2019, so if you happen to work and and enough in the remainder of 2019 to support the $4,000 contribution for 2019, you can leave the contribution in.