Amending previous returns for overcontribution to roth IRA

[koei15]

Hi,

I just found out that I've been overcontributing to my roth ira for 2018, 2019 and 2020. My wife also has the same issue for 2020.  We have filed as married filing jointly for all 3 years.  Am I able to amend my 2019 and 2020 returns via turbotax and if so, I'm not really sure what forms I need to fill out.  I will be withdrawing the excess contributions from those years via the platform where my IRA is.  Do I need to wait to get a 1099-R before filing the amendment for these years?

I understand for 2018 the process is the same, but I have to go through the paper route.

[DanaB27]

Yes, you can use TurboTax to amend your tax returns but you will need to print and mail your returns since you can't e-file prior year amended returns. Please see How to amend (change or correct) a return you've already filed.

Yes, you will request a regular distribution (without earnings) to resolve the excess contributions from 2018, 2019, and 2020 since it is after the due date of these tax returns. No, you do not have to wait for Form 1099-R. You will get the 2022 Form 1099-R next year and this distribution will belong on your 2022 tax return.

You will have to pay the 6% excess contribution penalty for 2018, 2019. 2020 and 2021. 

On your 2018 return (if you have the 2018 TurboTax Download version), you will enter the IRA contribution and TurboTax will automatically calculate the 6% excess contribution tax on Form 5329 part IV.

On your 2019 return, you will enter your 2019 contribution and then enter the 2018 excess contribution on the "Enter Excess Contributions" screen. TurboTax will automatically calculate the 6% excess contribution tax on Form 5329 part IV.

On your 2020 return, you will enter your 2020 contribution and then enter the 2018 plus 2019 excess contribution on the "Enter Excess Contributions" screen. TurboTax will automatically calculate the 6% excess contribution tax on Form 5329 part IV. For your wife enter the 2020 contribution and TurboTax will calculate the 6% penalty for her on her Form 5329.

On your 2021 return, you will enter the 2018 plus 2019 plus 2020 excess contribution on the "Enter Excess Contributions" screen. TurboTax will automatically calculate the 6% excess contribution tax on Form 5329 part IV. For your wife, you will enter her 2020 excess contribution on the "Enter Excess Contributions" screen and TurboTax will calculate the 6% penalty for her.

Steps to enter excess contribution on your 2021 return (the steps will be similar for the other years):

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. On the "Do you have any Excess Roth Contributions" answer "Yes"
5. On the "Enter Excess Contributions" screen enter the total excess contribution from 2018 + 2019 + 2020.

[koei15]

DanaB27,

Thanks for the detailed response!  I wanted to confirm your statement about not being able to e-file an amended return for previous years.  I was under the impression that turbotax software could do it for 2019 and 2020.  Is that not the case?  Or is that a question for a turbotax expert?

Thanks!

[DanaB27]

Yes, you won't be able to e-file your prior year's amended returns. The IRS does allow prior-year amended returns to be e-filed, but at the moment TurboTax does not have the capability to e-file prior-year returns.

[Nick2024]

I am in the process of amending a few returns for the same reason. TT wants to amend my state return as well. Am I required to do so? 

[KristinaK]

It's possible that you would need to amend the state return too. The best way to approach it is to start the state amendment and see if in the end there is a change in state tax liability. If yes, then file the state amendment as well.