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I see 6% penalty on my excessive contribution to ROTH IRA. However I got refund of all excessive contribution and paid 10% penalty on gain. Why 6% penalty not removed?
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I see 6% penalty on my excessive contribution to ROTH IRA. However I got refund of all excessive contribution and paid 10% penalty on gain. Why 6% penalty not removed?
In what year did you make the excess contribution?
In what year did you receive the return of excess contribution?
What is the code in box 7 of the Form 1099-R reporting the return of the excess contribution?
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I see 6% penalty on my excessive contribution to ROTH IRA. However I got refund of all excessive contribution and paid 10% penalty on gain. Why 6% penalty not removed?
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I see 6% penalty on my excessive contribution to ROTH IRA. However I got refund of all excessive contribution and paid 10% penalty on gain. Why 6% penalty not removed?
To remove the 6% penalty that TurboTax is showing on your 2018 return for the excess contribution made for 2018 you must go back through the Traditional and Roth IRA contribution section and, when TurboTax asks how much of the contribution you had returned to you, indicate $2,500 was returned. This will cause TurboTax to remove the 6% excess contribution penalty on the $2,500 that was returned.
The Form 1099-R that you entered would have been a code JP 2019 Form 1099-R (although a code J8 2018 Form 1099-R would produce the same result, assuming that no taxes were withheld from this distribution). Because the excess contribution was made in 2018, the earnings required to be distributed with the $2,500 returned contribution add to your income for 2018 when you enter this Form 1099-R. It's seems that you've already done this.
If the $2,500 was an excess contribution because of your modified AGI being in the phase-out range for Roth IRA contributions, the earnings added to you MAGI push you further into the phase-out range, causing some of your remaining Roth IRA contribution for 2018 to be an excess contribution subject to a 6% penalty, but less than the original $150 penalty unless your Roth IRA account balance doubled while the $2,500 was in the account. This is an unfortunate consequence of the way the law is written, making it difficult to know how much must actually be requested to be returned to eliminate all excess.
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I see 6% penalty on my excessive contribution to ROTH IRA. However I got refund of all excessive contribution and paid 10% penalty on gain. Why 6% penalty not removed?
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I see 6% penalty on my excessive contribution to ROTH IRA. However I got refund of all excessive contribution and paid 10% penalty on gain. Why 6% penalty not removed?
See this about how to amend using TurboTax:
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed"...>
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