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:
- Click on "Search" on the top right and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select “Roth IRA”
- Enter the Roth IRA contribution for 2024
- On the "Do you have any Excess Roth Contributions" answer "Yes"
- On the "Enter Excess Contributions" screen enter the total excess contribution from 2023
- Continue until the penalty screen and enter the excess contribution amount for 2024 withdrawn.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:
- Login to your TurboTax Account
- Click on the "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
- Answer "Yes" to "Did you get a 1099-R in 2024?"
- Select "I'll type it in myself"
- Box 1 enter total distribution (contribution plus earning)
- Box 2a enter the earnings
- Box 7 enter J and P
- Click "Continue"
- On "Is the IRA/SEP/SIMPLE box on this 1099-R checked?" screen answer "No, the box is blank"?
- On the "Which year on Form 1099-R" screen say that this is a 2025 Form 1099-R.
- Click "Continue" after all 1099-R are entered and answer all the questions.
- 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.
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