1099-R due to over funding need to Amend Previous Taxes

[Mr_Crow]

Thank you Dana,

A follow up question.  How do I double check that the Amended 2019 is doing what I expect?  Per my financial Advisor (Roth IRA Custodian) "What I do know is

      1) you have to pay tax on the $27.65 and 

       2) we took it out in time so you don’t have to pay the 6% penalty on the excess cont. "

[DanaB27]

You will look at the correct Form 1040 it should have the earnings of $28 (it will round up) on line 4b (taxable amount). 

TurboTax will also create Form 5329 and it should show a $3 (rounded up) additional tax on line 4 (10% early withdrawal penalty).

Correct you will not have the 6% penalty on the excess contribution because you withdrew the excess and earnings on time. 

[Mr_Crow]

Thanks again, I know this is snow balling but hopefully a final question.

In 2019 The State of IL altered my line 16 from $426 to $401 due to my confusion around buying and selling our primary home in the same tax year.  In summary, while I don't fully understand what numbers they changed to arrive at this.

Question:
In Amending my and State due to the original issue with the 1099-R. 
1)I assume the IL Amended needs to reflect the line 16 $401 change, Correct?
2)How should I go about making that change?  I'm guessing they changed the property tax from $8,513 to $8,020

I greatly appreciate your help.

[DanaB27]

You won't have to amend your IL state return because IL doesn't tax retirement distributions. Please see IL: Does Illinois tax my pension, social security, or retirement income?

You will only need to amend your federal return. 

[Anonymous]

I have a similar issue.  Received 1099-R for 2020  in 2021 for over-contribution made in 2019 Roth IRA  due to over AGI maximum for any Roth IRA contributions.  Box 7 has JP and box 1 has $7518.44 and $6458.87and box 2a has a taxable amount of  $518.44 (over age 59 1/2 ) and $458.87 (under 59 1/2) for each of us.  I was over 59 1/2 when this occurred but my husband was not (same maximum overage since we file jointly). 

Do I have to amend our 2019 tax return and pay taxes on only the box 2 amounts?  What form do I file for 2019? and do I remove the 1099-R from my Turbo tax 2020 tax return.  Will only my husbands taxable amount be penalized 10% since he was not 59 1/2 or will both?   Is there an additional 6% penalty added to the 10% for the period from April 8, 2019 (deposits made) to July 14, 2020 (Deposits removed)? 

Totally confused what to file for each person on what  year and form numbers, how to calculate taxes due, what lines to fill in?   Some directions say file form 1040X or Form 5329 or Schedule 2 (1040SR)  or  5498 or all of them???.  Which forms numbers do I file for each person, what year are the forms from, what lines do I fill in,  how do I calculate the taxes for each person owed and do I remove the 2020 1099-R's from my 2020 tax return.  Turbo tax said I had to file a 2019 amendment for these 2020 -1099-R's.    Since 2019 taxes were files by paper mail this will all have to be done manually.   

Also, do I have to file an amendment for 2019 Hawaii State tax as well?  

[DanaB27]

Yes, you will have to amend your 2019 tax returns to include the 1099-Rs. You do not need to delete the 1099-Rs from your 2020 return because the code P tells TurboTax to ignore the distribution information but if you prefer to delete them:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R”
3. Click on “Jump to 1099-R” and you should see the “Review your 1099-R info” screen
4. Click the "trash icon"

Only the earnings in box 2a are taxable income. Yes, only your husband will have the 10% early withdrawal penalty on the earnings because he was under 59 1/2 in 2019. You will not have the 10% penalty since you were over 59 1/2 in 2019. The 10% early withdrawal penalty is calculated on part I of Form 5329.

No, you do not have to pay the 6% excess contribution penalty because you removed the excess plus earnings before the due date of the 2019 tax return.

To clarify, you did not file your 2019 tax return with TurboTax or any other tax software?

The 1099-R amount from box 1 goes on line 4a of Form 1040 and box 2a goes on line 4b of Form 1040. The earnings from box 2a will go on Form 5329. Please see About Form 5329 to get the form and instructions. Also, see About Form 1040-X for the form and instructions.

Please see How do I amend my 2019 return? if you used TurboTax for your 2019 return.

Yes, you will have to amend the Hawaii state return as well.

[Anonymous]

I did use the Turbo tax 2019, but it posted a prepaid tax amount paid with extension that couldn't be corrected on my state tax.   So I ended up having to file by paper for corrections.  Do not want to attempt to use it to correct these issues when it was impossible to remove that unexplained tax payment.  It messed up my entire return.

I did receive two 5498 in August 2020 from Edward Jones but didn't know what to do with them?

Which year and which Form 1040 or 1040X and 5329  will I use to amend 2019?  2019 or 2020 forms?

Do I put both of our figures separately or combined, since only 10% applies to half?   Or do I have to file two separate 1040X's and 5329's?

I read 5329 instructions but I still can't figure out which part on that form applies to me?  It repeats the same thing in section I and IV, so which section applies to each of us with the age difference and the 10% penalty only for my husband?  We didn't have a form 5329 for 2019 at all so that didn't help to clarify which sections applies.

Do we owe additional tax on the 2a taxable amount plus his 10%, or does he pay only the 10% on box 2a taxable amount?  I can't really read the correct instructions until I know what year the form 5329 and 1040x will be from? 2019 or 2020?

This is super complicated with the age difference.  What tax will I be paying for my box 2a amount?

His will be a tax plus the 10% penalty and do both these amounts go on 1040 and 5329?  Please be specific per form year and line numbers?

How would I file this amendment on my 2019 turbo tax when the  State had to correct that incorrect pre-tax extension payment that wasn't paid which still appears on my turbo tax copy?

Will I need to file same for state of Hawaii?  I don't believe they tax pensions but IRA's, not sure?

Thanks so much.

[DanaB27]

You do not need to enter Form 5498 anywhere, they are for your records.

You stated the state tax return had a wrong amount  but the federal was correct? Then you can amend your federal return using TurboTax. If you need more detailed help try: What is the TurboTax phone number?

You will use the 2019 Forms for 1040 and 5329. The Form 1040X is used for multiple years, you will check 2019 on the top. 

You will combine the amount in box 1 and enter it on line 4a and the combine the amount in box 2a and enter it on line 4b on Form 1040. The earnings are taxed at your income tax rate.

You will enter the amount of box 2a on line 1 of Form 5329 and then follow the instructions to fill out the lines 2-4. You will only need to fill out part I. You will have one Form for you and one for your spouse.

In Hawaii, payments from the Roth IRA that are not qualified distributions will be taxed to the extent of earnings including the 10% additional income tax on early distributions.

[yj44442]

I have a similar question.

I had over contributed to my Roth IRA in 2019. Prior to filing my 2019 taxes I re-characterized the over contributions of the Roth IRA to a traditional IRA, and reported this in both the 'how much you transferred' section and the 'Roth IRA Explanation Statement' section when I filed my 2019 taxes last year.  This year, I received a 1099-R with the year '2020' listed on the form - box 1 of this 1099-R shows the amount that was transferred (recharacterizations + earnings), box 2a (taxable amount) shows $0, and box 2b (taxable amount not determined) is not checked. 

When filing my 2020 taxes, TurboTax said I may need to amend my 2019 return. 

Q1: Since I already submitted this information when filing my 2019 taxes, do I still need to amend my 2019 return?

Q2: If 'yes' to Q1, what would I change?

Q3: If 'yes' to Q1, do I also need to amend my Massachusetts state return?

Thank you!

[Anonymous]

Problem with Turbo Tax is we can't locate where the incorrect extension amount came from so can't remove it.  All these figures are transferred from the Federal Taxes so still not trusting the program to calculate correctly for 2019.  Where could I find this mistake in the program to remove it? Popped up on Hawaii State tax from Turbo tax:   It's  on form N-11, (2019) line 40, Amount paid with Extension. 790.00? 

Question1 :  Where is this coming from since I didn't enter this figure at any time?

The instructions say to file separate 5329 if filed joint return, which makes sense, since one pays 10% and one person will not.  

Question 2:  Form 5329, line 2.  Would this be the amounts  of $7000 for me and $6000  for spouse, which was the original contribution for each person?   The instructions are very vague  re what figure goes here, if any?   Why should I pay taxes on money I already paid taxes on before making the Roth deposit, so I'm assuming, the 7000 and 6000 should be on this line 2 to subtract from the taxable amount ?  This would then calculate the Taxable amount from 1099-R, 2a  on Line 3.  Why don't they just say, enter 1099-R 2a on Line 3?  

Question 3:  Do I need to file State Schedule AMD,  Explanation of changes on Amended Return as well?

[DanaB27]

No, you do not need to amend your 2019 return since you reported the recharacterization on your 2019 return. You can ignore the 1099-R with code R. @ yj44442

@Anonymous:

Please try these steps to delete the amount paid with extension:

1. Click “Deductions &Credits” on the top
2. Scroll down to "Estimates and Other Taxes Paid" and click "Show more"
3. Scroll down to “Income Taxes Paid” and click “Start”
4. You will see "Payments with Extension" and be able to edit amounts.

On line 2 of Form 5329 are the exception amounts entered that are not subject to the 10% early withdrawal tax. Only you will enter an amount in Line 2 because you are over 591/2 you have an exception. You will enter $518.44 and  the code is 12.(on line 1 you will have $518.44 from box 2a as well). Therefore, your line 3 will be $0 and your penalty tax will be $0.

Yes, you will have to file State Schedule AMD,  Explanation of changes on Amended Return.

[Anonymous]

Great,.  

Q1:  Are the below figures correct where they go as noted below?

Form 5329 for my husband who pays the 10% :

Line 1 :  Taxable amount from form 1099-R $458.87

Line 2:  Nothing

Line 3:  Taxable amount  $458.87

Line 4:  10% of 458.87 = $45.89  rounded up

Q2:  Do I enter his Gross Distribution $6458.87 anywhere on this form for either of us?

Q3:  Last and final.  I reviewed the instructions on 1040X.  4a does not apply to any tax return after 2017 per IRS revised instructions

From IRS 1040x Instructions:

Line 4a—Exemptions (for years before 2018 only) If amending a 2018 or later tax return, leave line 4a blank. The exemptions are not available to individuals after 2017.

Can I enter the total of both Gross Distributions in 1040X- 4a or not?  If not, then for an amendment to 2019, which type of  form 1040: 1040 or 1040SR (Originally filed)  or 1040x would I use?   

Your previous instructions: 1040 or 1040X?

The 1099-R amount from box 1 goes on line 4a of Form 1040 and box 2a goes on line 4b of Form 1040. The earnings from box 2a will go on Form 5329. Please see About Form 5329 to get the form and instructions. Also, see About Form 1040-X for the form and instructions.

your previous instructions (see copy below)

Q3:

On whichever 1040 is used for amendment, Where do I enter 1099-r Gross Distribution added together for both of us, 2a, taxable amount, and 5329-Line 4 Additional tax on the 1040 form.

Thanks for all your help.  The instructions from IRS are more confusing than helpful. 

[DanaB27]

Q1. Yes that looks correct.

Q2. No the gross distribution will not go on Form 5329.

Q3. No do not enter anything on line 4a on Form 1040X. You will enter the combined gross distribution (from box 1 1099-R) on line 4 a of Form 1040 not Form 1040X. The combined amount from box 2a from the 1099-Rs will go on line 4 b of the new Form 1040. You will have a new Form 1040 with the changes that will be included when you send Form 1040X.

The amount from line 4 on Form 5329 will go on Schedule 2 (Form 1040), line 6. And line 10 from Schedule 2 will go on the new Form 1040 line 23.

You will use the new Form 1040 to help you fill out the amended tax return Form 1040X.

@Anonymous 

[Anonymous]

Ok. I found the estimated deposit error. 

Q1:  Since the State sent me a correction letter and it was paid, if I remove the $790.00 estimated payment  now, will it be OK and not screw up the amended tax return? This was actually a refund for State Tax for 2017?

I completed the Federal Tax 2019 amendment on turbo tax 2019, finally.  Now having issues with it transferring to the Turbo Tax Hawaii State Tax as an amended return.  Treating it like a continuation of  2019 State return, wanting me to pay the combined amount from last year plus the addition amend amount.

The Turbo tax Hawaii State tax is not recognizing the 2019 changes as an amended return even though the information is transferred from the amended Federal?   

Q2:  How do I correct this?  It gives no option to choose to amend the return when you click on State.   It's supposed to be a block on N-11 to check but Turbo tax doesn't give you this option.  It just reviews, cks for errors and pay this amount, $1011, which is totally WRONG!

Please correct this TURBO TAX ERRO so I can file my state tax amendment.

Q3:  It isn't filing the AMD form either, probably because it's not recognizing an amended return.  Any solutions to this dilemma?  If I have to file AMD by hand, please advise which forms go on this form.

 I had to add a mortgage amortization of points for a refinanced 15 year loan for my home.  I can't find what form the Fed  tax return placed the posted amounts.  

Q4:  Please advise what form the amortized point are posted on.

Thanks so much