How do I include the Roth IRA excess distribution gain on my 2023 taxes ? It was timely but Fidelity will only send me the gain letter. The 1099-R won't come until 2025.

[dmacjr15]

Fidelity will only issue the earnings gain/loss in a letter to use for my 2023 taxes. In 2025, I'll get the official 1099-R. I have to include the gain/loss in my 2023 taxes to avoid any penalty. How do I include this in my Turbo Tax 2023 filing ? Any guidance would be appreciated. Thank you

[MinhT1 · Accepted solution]

The correct way to deal with the 2023 excess contribution is to follow the instructions in this good answer by Tax Expert DanaB27.

@dmacjr15

@NY2NC95

I have edited my answer.

[Edited 3/24/24 | 9:34 AM PST]

[dmacjr15]

thank you for the quick reply. I will update my 2023 taxes accordingly.

[NY2NC94]

Hi Minh,

The other TT answers to this question of pulling back an excess Roth contribution with earnings before the tax deadline for the year contributed talk about creating a 1099R.  Is your answer the better way of handling this issue? It certainly much easier.  Thanks.

[dmacjr15]

Hello @MinhT1 @NY2NC95 --- I am about to file my 2023 taxes and I see there is still some confusion around how I should report my 2023 Excess Roth IRA contribution. Rather then putting the gain on excess as "Other Reportable Income", I should now follow the steps for generating a 1099-R for 2023 ? We did remove the excess amount from the Roth before the 2023 Tax deadline (April 15, 2024), so it is considered timely and therefore no penalty. I have the amount of the gain and will report that on my 2023 taxes. I am just confused on how to go about this in Turbo Tax for my 2023 filing. I am also under 59 1/2 so what codes do I select in the 2023 filing ? If you could shed some light in this that would be appreciated. Thanks again

[RobertB4444]

If you removed it before the due date of the return you can also just ignore this since there isn't a taxable event and the 1099-R that will be arriving later will have code 'P' on it.  But if you want to dot the i's and cross the t's then, as @MinhT1 pointed out above you should use this answer from @DanaB27.

@dmacjr15