How do I correct an Ira over contribution made in 2023 for the year 2022?

[MaryK4]

You can apply the contribution made in 2023 as a 2023 contribution instead of designating it as 2022 to avoid the over contribution.

[eloshar12-]

I just turned 72 in 2023. The year 2022 is the last year I can contribute to my IRA. I have made the contribution in February 2023 for the year 2022. If you could just tell me how to fix this excess contribution on my taxes I would appreciate it. What forms are needed and how do I access these forms on Turbo Tax?

[DanaB27 · Accepted solution]

Please be aware, there is no age limit on making regular contributions to traditional or Roth IRAs as long as you have enough taxable compensation to make a contribution.

If you want to avoid paying the 6% penalty then you have to request the withdrawal of the excess contribution plus earnings by the extended due date (16 October 2023). If you removed the full contribution then you won't enter it in the IRA contribution interview.

You should receive a 2023 Form 1099-R with codes P and J (if it was a Roth IRA) or with codes P and 1 (if it was a traditional IRA) because the earnings will be taxable in 2022 since it was a contribution for 2022. But you might want to check with your financial institution since some custodians issue Form 1099-R with code 8 instead of P when the contribution was made in 2023 for 2022.  

A 2023 Form 1099-R with code P belongs on your 2022 tax return and you would have to amend your 2022 tax return when you receive the Form 1099-R in 2024. A  2023 Form 1099-R with code 8 belongs on your 2023 tax return.

@eloshar12-