I am requesting my brokerage to remove the excess deferral in March 2025. I haven't filed 2024 tax yet. My question is: I am reporting that 1099 income. If I also report excess contribution, won't that same income be taxed 2 times? How should I report to Turbotax and IRS? Thanks in advance!
You're going to receive a 1099-R for 2025 for the contribution that is returned to you. But you should go ahead and enter it on the 2024 return now so that it is out of the way. Then, when you receive the 1099-R in 2025, you can ignore it.
For this year You're going to enter the amounts as though you had received a 1099-R. Enter the total amount that you received in box 1, the earnings in box 2a (the return of contribution that you received should have been the amount that you contributed plus any earnings it had while it was in the account. Those earnings are taxable.) and code 8 in box 7.
That's it. Then you'll be done with this for 2024 and 2025.
How do you get around the problem that TurboTax requires a Payer's TIN on a 1099-R that you enter. ?