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Level 2
posted Feb 15, 2022 7:23:47 PM

Form 8880

For the 2021 tax year I contributed $6,000 to my Roth IRA. I made a premature withdrawal of contributions of $1,500. This is a non-taxable event.

 

On Line 1 of 8880 do I enter $6,000 or $4,500?

 

TIA.

0 3 1225
3 Replies
Expert Alumni
Feb 15, 2022 8:04:06 PM

It depends. Instead of entering this directly on form 8880, enter in the following manner instead.  Too many mistakes can occur if you enter directly in the forms. Let me guide you the proper way of entering.

  1. If you are working in Desktop, go to federal taxes>deductions and credits>retirement and credits>traditional and IRA contributions.
  2. As you navigate through the screens, enter $6000 as the contribution.
  3. After this is done, go to the retirement savings credit underneath the traditional and IRA contributions.
  4. Navigate through the questions. Do not enter the contribution made because you have already reported it.
  5. When you get to the screen that is entitled Credit for Retirement Saving Contribution, enter the $1500 as a 2021 qualified distribution.
  6. When done, your 8880 will have the full $6000 amount in line 1 and $1500 in line 4. 
  7. Caution, if you received a 1099R for the $1500 distribution, you may be subject to an early withdrawal penalty if taken out before 59 1/2. Also if you did not have your Roth opened for the five-year holding period, you may be taxed on the earnings.

Level 15
Feb 16, 2022 4:45:24 AM

TurboTax will automatically calculate the amount that needs to be present on line 1 of Form 8880 based on your entries elsewhere in TurboTax of your Roth IRA contributions and distributions as DaveF1006 described.  You do not enter anything yourself on line 1.  If your distribution from the Roth IRA was an ordinary distribution (code J, T or Q but no code 8, P, N or R)  the result will be $6,000 on line 1 and $1,500 on line 4

Level 2
Feb 16, 2022 8:42:05 AM

Yes, it is Code J.

 

Thanks both, for your help. Will follow your advice.