Thank you in advance for your assistance. I made a Roth IRA contribution of $7,000 in 2024. At the end of the year I fell into the phaseout range and had an $1,120 excess contribution. I removed t...
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Thank you in advance for your assistance. I made a Roth IRA contribution of $7,000 in 2024. At the end of the year I fell into the phaseout range and had an $1,120 excess contribution. I removed that and the earnings of $398. As expected, in early 2026 I received a 2025 1099-R reporting the full withdrawal and the taxable amount, however when I amended 2024 the $398 earnings increased my MAGI. The new excess was $1,400. So $280 more than I removed. So, I was correctly assessed the 6% penalty on the $280 on the amended return. my question involves the remaining $280 excess. At this point I have to remove it, but believe I can do so without removing more earnings, thus no MAGI increase issue. It’s now March 2026. I’m wondering if I should be requesting a removal of additional excess or an actual withdrawal of prinicipal. And then how that gets reported so the 6% penalty stops running. I believe I’ll have another 6% for 2025, but not after that. So, if removed in 2026 will I get a 2026 1099-R next year (2027)? And if so how do I report it? Do I send in a separate 5329 or input to the 2027 taxes. And if I request an actual distribution how does the IRS know it’s the $280 to cover the excess from 2024. I assume no 10% penalty is assessed as it’s a Roth. If I will get a 2026 1099-R to file next year can I create a substitute and report it this year, or should I wait? And how do I report it correctly? File a 5329 now or include it in the tax return? I apologize for the length but without all the info it would be hard to answer accurately. Again, thank you in advance for any info you can provide. I use TT premier desktop Gina
