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hannaxbear
New Member

How do I report my excess Roth IRA contribution in 2015 if I withdrew my contribution in 2016 but before filing taxes?

In 2015, I made contributed $5,500 to my Roth IRA. In early 2016, before filing my 2015 tax return, I realized that my contribution was too high based on my income (should have only been a few hundred), so I transferred the $5,500 out of my Roth IRA (the actual amount was $5,269.01, I'm assuming due to losses). How do I report this in Turbo Tax Deluxe 2015? And what do I report in my 2016 return next year? Thanks for your help!

1 Best answer

Accepted Solutions
MargaretL
Employee Tax Expert

How do I report my excess Roth IRA contribution in 2015 if I withdrew my contribution in 2016 but before filing taxes?

Edited 4/8/2015: You should report your earnings in the year the excess contribution is made. If you exceed the 2015 IRA contribution limit, you may withdraw excess contributions and earnings from your account by the due date of your tax return (including extensions). Since you have done exactly that, you are not subject to 6% tax on the excess contribution and there are no reporting requirements, for the contribution or the excess withdrawal. 

For 2016 tax return, you will receive Form 1099-R from the IRA administrator reporting the excess contribution withdrawal.  You will simply report the form. 

Some details:

https://www.irs.gov/publications/p590a/ch01.html#en_US_2015_publink1000230873 - shows example

https://www.irs.gov/Retirement-Plans/IRA-Year-End-Reminders

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4 Replies
MargaretL
Employee Tax Expert

How do I report my excess Roth IRA contribution in 2015 if I withdrew my contribution in 2016 but before filing taxes?

Edited 4/8/2015: You should report your earnings in the year the excess contribution is made. If you exceed the 2015 IRA contribution limit, you may withdraw excess contributions and earnings from your account by the due date of your tax return (including extensions). Since you have done exactly that, you are not subject to 6% tax on the excess contribution and there are no reporting requirements, for the contribution or the excess withdrawal. 

For 2016 tax return, you will receive Form 1099-R from the IRA administrator reporting the excess contribution withdrawal.  You will simply report the form. 

Some details:

https://www.irs.gov/publications/p590a/ch01.html#en_US_2015_publink1000230873 - shows example

https://www.irs.gov/Retirement-Plans/IRA-Year-End-Reminders

hannaxbear
New Member

How do I report my excess Roth IRA contribution in 2015 if I withdrew my contribution in 2016 but before filing taxes?

Thanks TurboTaxMargaretL!
mark847
Returning Member

How do I report my excess Roth IRA contribution in 2015 if I withdrew my contribution in 2016 but before filing taxes?

The tricky part is if there are earnings.  Make sure you withdraw your "Excess Earnings" before you file your return.  You will not receive a 1099-R until 2016, but the IRS says to include it on your 2015 return.  So create another 1099-R for the earnings.  Enter the Earnings on Line 1 Gross Distribution, and the same Earnings on Line 2a Taxable amount. On Line 7 use Code 7 if you are over 59 1/2.  There is actually a substitute 1099/W2 form that you can link to the virtual 1099-R for the current year.  It is Form 4852, "Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc." There are comment field for Lines 9 and Lines 10 of the form, so you can explain the Excess Earnings, and the fact that they were withdrawn before you filed your return, and won't be reported until 2016.  Anyway, the Excess Earnings then ends up on Line 16b, Pensions and Annuities.  Hope this helps someone because it took me 4 days to get this right, reading the IRS forms, searching Intuit and the Internet, and talking to the IRS and Intuit.
ivoree
Level 2

How do I report my excess Roth IRA contribution in 2015 if I withdrew my contribution in 2016 but before filing taxes?

Can you do this in Turbo Tax Premier? I only see the option for a 2015 1099-R.
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