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I contributed to IRA in 2020 but don't have any earned income that year. I am planning on withdrawing all of it by April 1st. Where in turbo would I need to enter it?
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I contributed to IRA in 2020 but don't have any earned income that year. I am planning on withdrawing all of it by April 1st. Where in turbo would I need to enter it?
If you withdraw the excess contribution plus earnings by April 15 then you will not have to pay the 6% penalty. Please tell your bank that it is a withdraw of excess contribution plus earnings.
Please follow these steps to enter the contribution and the withdraw:
- Login to your TurboTax Account
- Click on the Search box on the top and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select which IRA you have
- Continue answering the questions until "You Currently Have a Penalty" screen and enter the contribution amount you plan to withdraw by the due date
You will get a 1099-R 2021 in 2022 with codes P and J (for Roth IRA) or 1 (for traditional IRA). This 1099-R will have to be included on your 2020 tax return and you have two options:
- You can wait until you receive the 1099-R 2021 in 2022 and amend your 2020 return or
- You can report it now in your 2020 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or box 14 State withholding. Then you must enter the 2021 1099-R into the 2021 tax return since the withholding is reported in the year that the tax was withheld. The 2021 code P will not do anything in 2021 tax return but the withholding will be applied to 2021.
To create a 1099-R in your 2020 return please follow the steps below:
- Login to your TurboTax Account
- Click on the Search box on the top and type “1099-R”
- Click on “Jump to 1099-R”
- Select "I'll type it in myself"
- Box 1 enter total distribution (contribution plus earning)
- Box 2 enter the earnings
- Box 7 enter P and J (if you had a Roth IRA) or 1 (if you had a traditional IRA)
- On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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I contributed to IRA in 2020 but don't have any earned income that year. I am planning on withdrawing all of it by April 1st. Where in turbo would I need to enter it?
If you withdraw the excess contribution plus earnings by April 15 then you will not have to pay the 6% penalty. Please tell your bank that it is a withdraw of excess contribution plus earnings.
Please follow these steps to enter the contribution and the withdraw:
- Login to your TurboTax Account
- Click on the Search box on the top and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select which IRA you have
- Continue answering the questions until "You Currently Have a Penalty" screen and enter the contribution amount you plan to withdraw by the due date
You will get a 1099-R 2021 in 2022 with codes P and J (for Roth IRA) or 1 (for traditional IRA). This 1099-R will have to be included on your 2020 tax return and you have two options:
- You can wait until you receive the 1099-R 2021 in 2022 and amend your 2020 return or
- You can report it now in your 2020 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or box 14 State withholding. Then you must enter the 2021 1099-R into the 2021 tax return since the withholding is reported in the year that the tax was withheld. The 2021 code P will not do anything in 2021 tax return but the withholding will be applied to 2021.
To create a 1099-R in your 2020 return please follow the steps below:
- Login to your TurboTax Account
- Click on the Search box on the top and type “1099-R”
- Click on “Jump to 1099-R”
- Select "I'll type it in myself"
- Box 1 enter total distribution (contribution plus earning)
- Box 2 enter the earnings
- Box 7 enter P and J (if you had a Roth IRA) or 1 (if you had a traditional IRA)
- On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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