2023 Excess Roth IRA Contribution Made in 2024

[helpplease44]

Need help completing my 2023 taxes (I filed the extension and now they are due Oct 15) with the following scenario:

$2,537-excess contribution made on 2/9/2024 for tax year 2023 (year prior contribution to Roth IRA)

$67.78-earning from $2537 excess contribution made in 2024 for tax year 2023.

Removed both $2537 and $67.78 in 2024 before Oct 15 deadline from Roth IRA.

Questions-

1) Do I fill out form 5329 for 2023 tax year or 2024 tax year and how so? I believe I will only owe taxes on the $67.78 earnings but not the 10% early withdrawal penalty since I removed before the extended Oct 15 deadline for the 2023 taxes.

2) Do I fill out form 1099R only for 2024 tax year or do I need to report for 2024 tax year? 

3) Is there anything else that needs to be reported for tax purposes?

I want to be able to avoid completing an amended tax return for 2023. 

Thank you!

[tagteam]

I will page @dmertz who is very knowledgeable in this area.

[fanfare]

The allocable earning belong on your 2023 tax return.

If you don't want to have to amend, you should include that amount in your original 1040 filing Line 4b.

Nothing goes on your 2024 return, unless the custodian withheld income tax (yes it has happened to some people).

Search the forum for how to use 1099-R  Code PJ to put that amount on your 2023 tax return.

There is no penalty so you don't need the form 5329.

@helpplease44 

[helpplease44]

I read on turbotax before the following which is why I am confused:

"If you made the contribution to your Roth IRA in 2024 (between January 1, 2024 and the 2023 filing deadline without extensions) but you designated it as a 2023 contribution and you withdrew it in 2024, the Form 1099-R you get will be for 2024. Include the Form 1099-R on your 2024 return. Your Form 1099-R will have code 8 and a code J in box 7."

[helpplease44]

Dates of everything occurred in 2024-

2/9/24- $6,500 contribution last year for roth ira 2023

3/31/24 and 6/30/24- Interest paid 

8/29/24- withdrawal of excess contribution last year ($2537 removed)

8/29/24- excess earnings withdrawal 

[fanfare]

The post you quoted above is not correct.

Yes, misinformation on the forum causes confusion.

THe 1099-R you will get in the future - Feb 2025 - will be a 2024 1099-R with  Code PJ which means prior which means 2023.

TurboTax 2024 will instruct you to amend.

@helpplease44 

[helpplease44]

The quoted paragraph I posted was not in a forum but in instructions on TurboTax when I first discovered the excess contribution. That is why I am confused on how to proceed.

I have not received the 1099-R form since everything occurred from Feb, 2024-this past month but I believe I should be receiving a 1099-R form in Jan, 2025.

[helpplease44]

Thank you! Any advice on this is much appreciated! @dmertz and @Opus17

[fanfare]

Did you decide what to do?

Enter a made-up 1099-R with code PJ

put the earnings $68 in box 1 and box 2a

don't check any boxes

don't check the IRA/SEP/SIMPLE box because you have a Roth IRA.

The trick is to tell TurboTax you have a 2024 1099-R

It should ask you that in the Step by Step process.

This should give you the earnings in line 4b

@helpplease44 

[helpplease44]

I appreciate all of your help and responses.

I guess I am just confused on why the 1099-R needs to be placed in the taxes for 2023 when all of this occurred only in 2024 and none occurred in 2023.

[fanfare]

See most recent IRS Pub 590A for the IRS documentation, which , unfortunately, contradicts the interpretation of our guru @dmertz.

Although code PJ is the expected document, @dmertz recently informs us that

some custodians may code 8J, which more closely matches your intuition.

If you can call Monday, maybe the custodian can tell you what they will do.

@helpplease44