Do I need to amend 2016 AND 2017 taxes if I withdrew excess 2016 Roth IRA contributions in Mar2018?

[dmertz]

Nothing other than the 6% excess-contribution penalty gets added to your 2016 tax return.

The code J 2018 Form 1099-R gets reported on your 2018 tax return (2018 Form 5329 Part IV line 20 and 2018 Form 8606 Part III line 19).  2018 TurboTax will do this automatically when you enter the Form 1099-R and indicate that "you cashed it out).  If you made no Roth IRA contributions for any year prior to 2016, the taxable amount calculated on 2018 Form 8606 Part III [not Part IV as I orignally typed] will be the difference between the amount in box 1 and the amount of your 2016 excess contribution.  This difference will also be subject to the 10% early-distribution penalty on 2018 Form 5329 Part 1.

[vee_gee]

I'm seeing all the calculations and figures that you mention on my 2018 F5329 and F8606 (I assume it was a typo when you said "the taxable amount calculated on 2018 Form  >>8606<< Part IV  will be the difference between the amount in box 1 and the amount of your 2016 excess contribution", you meant Form 5329 Part IV).

The reason for my concern is that I do not see the difference between the amount in box 1 of 2016 1099-R and the amount of my 2016 excess Roth contribution ("2016 Roth income") anywhere though I see both figures on various lines. Since I contributed to Roth for many yrs before 2016 (some other reason?), the income from the early 2016 Roth distribution seems to get zeroed out by some calculation. So, line 25 Part IV of 2018 F5329 and line 4 Part I of 2018 F5329 are 0 in Turbo Tax.

Conceptually, what is the difference between the incomes in box 2a of 1099-R for 2017 (PJ) and the undetermined income (hypothetical box 2a) of 1099-R for 2016 (J)? I earned both incomes, yet I pay the 10% penalty only on the income of box 2a of 2017 1099-R (PJ) via line 4 Part I of 2017 F5329 and not on the (undetermined by Custodian but determined by me) income of 2016 1099-R (J) via line 4 Part I of 2016 F5329?  I am, of course, very happy if I am not liable for anything other than the 6% penalty for 2016 excess contribution for the 2016 amendment.

Speaking ONLY of 2017 amendment, since I do have the 10% penalty on line 4 Part I of 2017 F5329 on the income of line 1 Part I of 2017 F5329, does this line 1 income go on my modified AGI on 2017 1040X? Or nothing changes on the 2017 1040X other than line 10? That is, I only pay tax penalties 6% from 2016 excess + 10% from 2017 Roth income and do not modify AGI since I did not earn the income *IN* 2017? I spent a lot of time figuring out the tax after modifying the 2017 AGI because of the box 2a income from 2017 F1099-R (PJ).

I am clearly going batty now. TurboTax does not have prior year amendment software for Macs to download, otherwise I'd have blamed TT if the IRS were to come after me :). Since I am filing the 1040X by filling out the forms manually, I want to make sure that I am not under reporting anything.
 
Thank you.

[dmertz]

I meant the taxable amount of the 2018 code J distribution will be calculated on 2018 Form 8606 Part *III*, not Part IV.  I was somewhat repeating what I had said in the first sentence of that paragraph.  I've corrected that.

You have not received any 2016 Form 1099-R.  Your Forms 1099-R are 2018 Forms 1099-R.  The difference between  box 1 of the code J 2018 Form 1099-R and the amount of your excess contribution for 2016 is calculated on 2018 Form 8606 Part III and is the amount of that distribution that is subject to income tax and early-distribution penalty.  Make sure that Form 8606 line 22 shows your basis which includes your excess Roth IRA contribution for 2016.

[vee_gee]

Thank you.
FWIW, I've filed the amendments now. It's all still quite confusing to me.