I contributed fully allowable amount for 2022 Roth IRA ($6500). While filing 2022 taxes I found out that i was ineligible to contribute to Roth IRA due to income limit threshold. I recharacterized the amount (+ earnings on it) in April 2023 (before the tax filing deadline (orig amt + earnings) as 2023 Roth IRA contribution. I reported the earnings ($140) as income in my 2022 tx return with explanation note that it was the earning from excess Roth contribution. I entered the amount even though I did not receive any 1099-R from the custodian (Fidelity) in 2022 and paid tax on it.
Now in 2023, I received 1099-R from Fidelity for that withdrawal. Since I am under below retirement age, it was labeled as early distribution (code J in box 7) along with code P (in Box 7) indicating that excess contributions and earnings were taxable in 2022.
Am I supposed to include this 1099-R in my 1040 for 2023? Would including it add the earnings ($140) to my income and assess tax on it? Or should I omit it completely? TurboTax already downloaded it from the Fidelity, along with my 1099-INT & 1099-DIV.
Any help would be greatly appreciated. Thanks in advance for any and all responses.
No, if you already entered a 2023 Form 1099-R with codes P and J to report the earnings when you filed your 2022 tax return then you will not need to amend the 2022 tax return.
You don't need to delete the 2023 Form 1099-R with code P and J from your 2023 return since the code P will tell TurboTax to ignore the income on your 2023 return.