Excess Roth IRA Contribution in 2023 and 2024 – How to Amend My Taxes?

[Meinc]

I recently discovered that I made excess Roth IRA contributions of $6,500 for 2023 and $6,210 for 2024. I contacted my broker today (before April 15, 2025) to remove the excess contributions for both years. I was informed that I will receive Form 1099-R in 2026 for the withdrawal.

Since I withdrew the 2024 excess contribution before April 15, 2025, I understand that I will not be subject to the 6% excise tax for that year. However, I will owe a 6% penalty on the excess 2023 contribution because it remained in the account beyond the 2023 tax filing deadline.

Additionally, when the broker processed the withdrawal, I incurred a loss of $278.55 on the 2024 excess contribution.

My Questions:

1. How do I amend my tax filings using TurboTax? I submitted my 2024 Tax already.
• Do I need to amend both 2023 and 2024 tax returns using Form 1040-X and Form 5329, or do I only need to file Form 5329 only? A step-by-step guide for using TurboTax would be greatly appreciated.
2. Should I wait until I receive Form 1099-R in 2026 to amend my 2023 and 2024 tax returns, or should I amend them as soon as possible?
• Will I owe interest or additional penalties if I wait?
3. How many years of the 6% penalty do I owe on the 2023 excess contribution?
• Does the penalty amount depend on whether I amend my taxes before April 15, 2025, versus after receiving Form 1099-R in 2026? Will I have to pay interest if I choose to wait until 2026?
4. Since I incurred a loss of $278.55 on the 2024 excess contribution, do I still owe the 10% early withdrawal penalty on earnings? Can the loss be deducted from my taxable income?

Than you very much for your help!

[DanaB27]

1. and 2. Yes, you will need to amend your returns to add the 6% penalty for the 2023 excess if you didn't include it on the original filed returns. Please see How do I amend my federal tax return for a prior year? If you had the 6% penalty for the 2023 excess on the 2024 original return then you you do not need to amend your 2024 return since you did not have any earnings on the 2024 excess. Therefore, it will not change the taxable amount and TurboTax would only add an explanation statement.

3. You will have to pay the 6% penalty for the 2023 excess on your 2023 and 2024 tax return. You should have taken a regular distribution without earnings for the 2023 excess. You will get a 2025 Form 1099-R with code J (if you are under 59 1/2) and when you enter this next year on your 2025 tax return it will resolve the penalty. It would be best to pay the 6% excess contribution penalty as soon as possible. Please see IRS penalties for additional information.

4. There is no 10% penalty on the return of excess contributions before the due date.

No, you cannot deduct the loss on your return.

To add the 6% penalty on your 2023 return, all you have to do is add the IRA contribution in the IRA contribution interview under Deductions & Credits.

On your 2024 return you will follow these steps to add the 6% penalty:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. Enter the Roth IRA contribution for 2024
5. On the "Do you have any Excess Roth Contributions" answer "Yes"
6. On the "Enter Excess Contributions" screen enter the total excess contribution from 2023
7. Continue until the penalty screen and enter the excess contribution  amount for 2024 withdrawn. ($6,210)

To enter the 2025 Form 1099-R with code PJ:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2024?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2a enter the earnings
8. Box 7 enter J and P
9. Click "Continue"
10. On "Is the IRA/SEP/SIMPLE box on this 1099-R checked?" screen answer "No, the box is blank"?
11. On the "Which year on Form 1099-R" screen say that this is a 2025 Form 1099-R.
12. Click "Continue" after all 1099-R are entered and answer all the questions.
13. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2023" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2024.
 

[Meinc]

Thank you so much for your explanation. I just want to confirm if my action items are correct. 

Amend 2024 Return:

• Need to pay 6% of the 2023 excess contribution  $6500*6%= $390 (removed the excess yesterday)
• File 1040-X 
• Your Roth Contribution: $7000
• Your Excess Roth IRA Contribution for prior years: $6500
• Q1: Contribution withdrawn before due date of your return: $6210 (I guess not $6210+$6500, because $6500 was not withdrawn before April 14, 2024?)

• Need to file a 1099-R (will receive the form in 2026) but can have a DIY form (Q2: Is there an option to not enter 1099-R when amending 2024 return but enter the 1099-R when filing 2025 taxes in 2026? Or it has to go with 2024 tax amendment?)
• Box1: Gross distribution: $5931.45 (2024 excess was $6210, but had a loss of $278.55) Q3: Is this correct?
• Box 2a: Taxable amount: 0 (because I had a loss) Q4: Is this correct?
• Box7: J and P
• Explain the return of contribution: Received a return of $6210 excess Roth IRA contribution with a loss of $278.55. 

Amend 2023 Return:

• Need to pay 6% of the 2023 excess contribution  $6500*6%= $390 (removed the access yesterday)
• File 1040-X and Form 5329 

• Need to file a 1099-R (will receive the form in 2026) but can have a DIY form 

• Box1: Gross distribution: $6500 
• Box 2a: Taxable amount: 0 
• Box7: J 
• It did not ask for the year of the 1099-R. Q5 Is that okay? 

I will receive 2025 1099-R forms in 2026. Just ignore those forms when I file my 2025 tax. Q6: Is that correct?

Total Penalty: $390*2=$780 + possible interests (not sure how the interests are calculated?) 

Q7 Any mistakes of my action items?

Thank you so much for your help!

[DanaB27]

Q1. Yes, you enter $6210 as withdrawn by the due date. You withdrew the 2023 excess contribution after 2024 therefore you still need to pay the 6% penalty on this excess contribution. Yes, the special treatment only applies if you withdrawn the excess plus earnings before the due date. The due date of the 2023 return has passed therefore you will have to pay 6% penalty since the excess wasn't removed by December 31, 2024.

Q2. If this was a contribution made in 2024 withdrawn in 2025 then this will have to be entered on your 2024 return.

Q3 Yes, this is correct.

Q4 Yes. this is correct.

Q5. You do not add a Form 1099-R in your 2023 amended return. The 2025 Form 1099-R with code J will be reported on your 2025 return.

Q6. No, you will enter the 2025 Form 1009-R with code J on your 2025 return. But you can ignore 2025 Form 1099-r with codes PJ assuming it had no taxes withheld.