I had an excess contribution to my 2024 Roth. I've already withdrawn the amount of the excess contribution along with the earnings on it. How to I enter this in TurboTax?

[philkoltko]

It looks like there's a spot for "Your Excess Roth IRA Contributions for Prior Years" and I entered my excess contribution there. But now the TurboTax review is insisting that I provide a 1099-R and - since I didn't withdraw the excess until early 2025 - I don't have that 1099-R yet. I'm ok with filing an amended return next year or - if it's possible - handling it all this year. I just need to know what to fill in an where for either of those options.

[DanaB27 · Accepted solution]

No, do not enter anything under "Your Excess Roth IRA Contributions for Prior Years", this is if you made excess contribution before 2023 and did not remove them.

If you made an excess contribution in 2024 and withdrew the 2024 excess Roth IRA contribution plus earnings in 2025 before the due date, then you will get a 2025 Form 1099-R in 2026 with codes P and J. This 1099-R will have to be included on your 2024 tax return and you have two options:  

• You can wait until you receive the 2025 Form 1099-R in 2026 and amend your 2024 return or
• You can report it now in your 2024 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 2025 Form 1099-R into the 2025 tax return since the withholdings are reported in the year that the tax was withheld. The 2025 code P will not add anything to your income in the 2025 tax return but the withholdings will be applied to 2025.

To enter a 2025 Form 1099-R in your 2024 return please follow the steps below:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2024?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2a enter the earnings
8. Box 7 enter J and P
9. Click "Continue"
10. On "Is the IRA/SEP/SIMPLE box on this 1099-R checked?" screen answer "No, the box is blank"?
11. On the "Which year on Form 1099-R" screen say that this is a 2025 Form 1099-R.
12. Click "Continue" after all 1099-R are entered and answer all the questions.
13. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2023" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2024.

Also make sure you indicate in the IRA contribution interview that you withdrew the excess contribution by the due date:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. Enter the Roth IRA contribution
5. Continue until the penalty screen and enter the excess contribution amount withdrawn.

[philkoltko]

Thanks! That worked.

One thing to note for whoever looks at this answer in the future: Apparently when you enter the earnings associated with your Roth withdrawal, it bumps up your AGI. When your AGI gets bumped up, it lowers the maximum allowable Roth contribution. So if you had withdrawn exactly the amount TurboTax had previously told you that you overcontributed, you'll likely learn that you *still* have overcontributed (because your limit fell after you entered the earnings on your correction).

So when you withdraw your excess from your Roth, pull out more than what the initial limit calculations told you. In my case, I needed to pull out about 15% extra before things balanced out.