How to file 2022 amendment in Turbox Tax for withdrawal of excess Roth IRA contribution?

[DatBio]

In Decmember 2023, I withdrew 6,000 from my Roth IRA for the toal amount I contributed in year 2022 in which I was not qualified due to income limit.  Now I want to file for the amendment for 2022 tax to report this and pay for the 6% penalty.

Question is how to do this in Turbo Tax desktop version?  Please help and provide detailed steps.

I have started to amend my tax return.  But then, do I enter the 1099-R that I recieved in for tax year 2023. Or, what exactly steps should I do in Turbo Tax?

[tagteam]

I'll page @dmertz again. Please check back later.

[fanfare]

Since you missed the deadline to withdraw excess without penalty, you owe a 6 % penalty for 2022

you also have to show the resolution of the excess on your 2023 return.

If you already filed 2023 without it , you'll have to amend that one also.

@DatBio 

[DatBio]

I have withdrawn the excess money out of Roth IRA in 2023, got the 1099-R in January 2024, and taken care of it in Tax 2023. I just need to file 2022 Tax Amendment to pay for the 6% penalty.

In turbotax, it is unclear how to do so to pay the 6% penalty. I have 1099-R for year 2023 for the withdrawal. 

[dmertz · Accepted solution]

The Form 1099-R (which should have code 1 or 7) goes on your 2023 tax return.  The amendment to your 2022 tax return is only to add 2022 Form 5329 Part IV to indicate the excess Roth IRA contribution and pay the 6% penalty.  This is done by entering the Roth IRA contribution under Deductions & Credits and, when TurboTax indicates that you have made an excess contribution, indicate that none of the excess will have been returned by the due date of your 2022 tax return.

[DatBio]

Hi @dmertz @tagteam

Thank you for the help!

I never enter my Roth IRA contribution in turbox tax because I thought I don't need to as there is no tax benefits. Is it actually required to do so? If I have not filed my Roth Contribution in my past returns, will it impact my Roth IRA account?

Note: if I had entered my Roth IRA contribution for tax year 2022, turbotax would have warned me that my income limit was too high and I wouldn't be in this mess. Outch.

[dmertz]

Excess contributions are required to be reported on your tax return.

It's beneficial to enter Roth IRA contributions so that TurboTax can check for excess contributions and can track your basis in Roth IRA contributions, information necessary to determine the taxable amount if you receive a nonqualified Roth IRA distribution.