Excess Roth IRA contribution

[geov]

Please help me resolve this problem using 2024 Turbo Tax Deluxe

I accidently made a Roth IRA deposit of $7000 on April 11, 2022 for the 2022 tax year in a year that I had no income (other than pension and SS)

The mistake was caught and the excess contribution was withdrawn on 4-2-24.

The resulting 1099-R shows the withdrawal with a “T” code.

How do I now address the penalty tax when filing me 2024 taxes?

Do I need to file a Form 5329 and for one year or two year penalty?

Thanks

[DanaB27]

You will have the 6% penalty on your 2022 and 2023 return (assuming you could not apply the 2022 excess as a 2023 contribution). If you didn't pay the 6% penalty then please see How do I amend my federal tax return for a prior year? to add Form 5329 for 2022 and 2023.

On your 2022 return all you have to do is enter the Roth IRA contribution.

On your 2023 return follow these steps:

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 2022
6. Continue through the questions

To enter the 2024 Form 1099-R with code T on your 2024 return which will resolve the excess contribution:

1. Login to your TurboTax Account 
2. Click on "Search" on the top and type “1099-R” 
3. Click on “Jump to 1099-R” and enter all your 1099-Rs
4. Click "Continue" on the "Review your 1099-R info" screen
5. Continue through the questions until the "Do you have any Excess Roth Contributions" answer "Yes"
6. On the "Enter Excess Contributions" screen enter the total excess contribution from 2022 (assuming this wasn't applied to 2023).

[geov]

Correct, I had no way around recharacterizing the contribution !!

So I don't need to do anything with my 2024 filing? Just amendment the 2022 and 2023 flings?

But the 1099-R is from 2024. Do I still enter that into my 2024 fling?

[DanaB27]

Yes, you will enter the 2024 Form 1099-R on your 2024 return with the steps mentioned above. This will resolve the excess contribution.

Yes, you will need to amend the 2022 and 2023 return.

[geov]

Thank you so much DanaB27. You were SO helpful !!

Just to recap to make sure I have it straight:

• Amend 2022 tax form (1040-X) with the Roth contribution for that year, include 2022 Form 5329, pay penalty
• Amend 2023 tax form (1040-X), include 2023 Form 5329 with the Roth contribution from previous year, pay penalty
• Include 1099-R in the 2024 tax form. No need to file a Form 5329, no further penalty.

And one last thing. Is there a timeline for filing the amended returns? Can I file 2024 tax forms in April and amended 2022, 2023 forms after April 15th?

[DanaB27 · Accepted solution]

Yes, this is correct but you will have Form 5329 on your 2024 return showing that the distribution resolved the excess contribution.

Yes, you can file your 2024 return and then amend your 2022 and 2023 returns. Please see What is the deadline for filing an amended return?

[geov]

Hi DanaB27

I think I've gotten everything done with the 2022 and 2023 amended tax forms but on working on the 2024 filing I've entered the 1099-R for the Roth distribution but its not generating a Form 5329 and when I try to hand enter I'm having to "override" Line 18 & Line 20 entry. When I do a the Federal Form Check its getting an Error Message saying I can't override and still file electronically??? Am I doing anything wrong??

[geov]

Never mind. I thing I resolved the issue. It's clearing the federal review now.