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Level 1

How do I report a 2018 excess Roth IRA contribution withdrawn in 2019? I can't input values in Form 1040 lines 4a/4b (Form 8606 instructions).

How do I report a 2018 excess Roth IRA contribution withdrawn in 2019? I will not receive a 1099R until later this year and Form 8606 states "you must include the amount of the distribution of the returned contributions you made in 2018 and any related earnings on your 2018 Form 1040, line 4a; or Form 1040NR, line 17a. Also include the related earnings on your 2018 Form 1040, line 4b; or Form 1040NR, line 17b" and that related earnings are subject to the additional 10% tax on early distributions in Form 5329. However, Turbo Tax will not let me input values in Form 1040 lines 4a/4b and is generating the 6% penalty on Form 5329.


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Level 12

How do I report a 2018 excess Roth IRA contribution withdrawn in 2019? I can't input values in Form 1040 lines 4a/4b (Form 8606 instructions).

You can enter the 1099-R that you will receive next year on this year's tax return, which will correct the excess and report the earnings income this year.  The IRA custodian won't send to you the code JP 2019 Form 1099-R until near the end of January 2020.   You'll need to report this on your 2018 tax return as if you have already received the Form 1099-R.:

  • Box 1 = total received back
  • Box 2a = earnings portion
  • Box 7 = codes J and P

In the follow-up, indicate that this is a 2019 Form 1099-R.  On Form 1040, TurboTax will include the excess contributions on line 4a, the earnings on line 4b, and will include an early-distribution penalty (10%) on the earnings on Form 5329.

The Code P drop-down will say ''earnings/excess deferrals taxable in 2017'' but it means taxable in the previous year which is appropriate in your situation since this is a 2019 Form you are entering.  

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Expert Alumni

How do I report a 2018 excess Roth IRA contribution withdrawn in 2019? I can't input values in Form 1040 lines 4a/4b (Form 8606 instructions).

You can enter the 1099-R so that your income taxes withheld get credited to this year's return.  Box 7 should have the code P which will indicate that the income was taxable last year.  TurboTax won't include the distribution on this year's tax return (code P tells the program it was taxable in 2018), but the tax withheld will be credited to this year's return since you have the 2019 1099-R to enter.  After you enter the 2019 1099-R, double-check your 1040 to make sure of this.  

 

On the follow-up question, you will choose 2019 just like you did last year.  You will get a message that says you may need to amend, but you can ignore that message since you reported the distribution and paid any taxes and/or penalties on your 2018 tax return.  

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Level 12

How do I report a 2018 excess Roth IRA contribution withdrawn in 2019? I can't input values in Form 1040 lines 4a/4b (Form 8606 instructions).

You can enter the 1099-R that you will receive next year on this year's tax return, which will correct the excess and report the earnings income this year.  The IRA custodian won't send to you the code JP 2019 Form 1099-R until near the end of January 2020.   You'll need to report this on your 2018 tax return as if you have already received the Form 1099-R.:

  • Box 1 = total received back
  • Box 2a = earnings portion
  • Box 7 = codes J and P

In the follow-up, indicate that this is a 2019 Form 1099-R.  On Form 1040, TurboTax will include the excess contributions on line 4a, the earnings on line 4b, and will include an early-distribution penalty (10%) on the earnings on Form 5329.

The Code P drop-down will say ''earnings/excess deferrals taxable in 2017'' but it means taxable in the previous year which is appropriate in your situation since this is a 2019 Form you are entering.  

View solution in original post

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Level 12

How do I report a 2018 excess Roth IRA contribution withdrawn in 2019? I can't input values in Form 1040 lines 4a/4b (Form 8606 instructions).

Edited the above to reflect current Form 1040 line numbers.  
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Level 1

How do I report a 2018 excess Roth IRA contribution withdrawn in 2019? I can't input values in Form 1040 lines 4a/4b (Form 8606 instructions).

Thank you for the help last year. I'm revisiting for some clarifying questions on the 2019 tax return. Since in my 2018 tax return i used the approach suggested above, for my 2019 tax return, do i ignore the 2019 1099-R I received for this transaction or input the information on the 2019 1099-R in my 2019 tax return? I think i need to include the 1099-R in my 2019 return so the taxes paid are included in my 2019 return. Thank you!

Highlighted
Expert Alumni

How do I report a 2018 excess Roth IRA contribution withdrawn in 2019? I can't input values in Form 1040 lines 4a/4b (Form 8606 instructions).

You can enter the 1099-R so that your income taxes withheld get credited to this year's return.  Box 7 should have the code P which will indicate that the income was taxable last year.  TurboTax won't include the distribution on this year's tax return (code P tells the program it was taxable in 2018), but the tax withheld will be credited to this year's return since you have the 2019 1099-R to enter.  After you enter the 2019 1099-R, double-check your 1040 to make sure of this.  

 

On the follow-up question, you will choose 2019 just like you did last year.  You will get a message that says you may need to amend, but you can ignore that message since you reported the distribution and paid any taxes and/or penalties on your 2018 tax return.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post