@vc4 wrote:
Just to clarify:
1. Do I need to manually edit w2 box 12b with updated ROTH contributions? Will it not flag IRS because of the mismatch?
2. Why do I need to again report $1300 as misc income? Shouldn't it's already be part of W2 box 1 right?
1) No. You do not change the W-2. The W-2 reports the contribution in box 12 that reports what happened, you cannot change what happen in the past.
2) You do not report a 401(k) Roth (Designated Roth) as misc income because Roth contributions are always after-tax money so it is not taxed again when returned and not reported anywhere as income. Only the earnings (if any) that are returned are taxed in the year returned, not the year contributed if different years.
For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
