- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
I stupidly contributed to Roth IRA even though I was not qualified. I just found out but already filed 2020 return. What's the best course of action to correct?
1) What should I do with the contribution?
2) What should I do with my tax return that has already been filed and accepted?
Do you have an Intuit account?
You'll need to sign in or create an account to connect with an expert.
- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
I stupidly contributed to Roth IRA even though I was not qualified. I just found out but already filed 2020 return. What's the best course of action to correct?
You should withdraw the contribution and earnings on it by May 17, 2021, the due date of your 2020 tax return. That will prevent you from being penalized for the amount of the excess contribution.
Next, you should ask your broker for the amount of earnings on the excess contribution. Then, you can amend your 2020 tax return to report the distribution and earnings as follows:
To report the earnings on the excess contribution, you should enter a Substitute form 1099-R and enter it on your amended 2020 tax return. You will see an option for this when you see the screen Tell us Which 1099-R You Have.
Enter in box 1 the distribution amount. In box 2 enter the earnings. Enter code "P" and "Q" in box 7. Work through the questions in TurboTax after you entered the 1099-R until you see a question regarding why you made the distribution, to which you will respond it was a return of an excess contribution. Indicate that the year on the form 1099-R is 2021.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Still have questions?
Make a post