turbotax icon
turbotax icon
turbotax icon
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

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?

I want appreciate input on two questions:
1) What should I do with the contribution?
2) What should I do with my tax return that has already been filed and accepted?
Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Reply
ThomasM125
Employee Tax Expert

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.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Use your Intuit Account to sign in to TurboTax.
By selecting Sign in, you agree to our Terms and acknowledge our Privacy Statement.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies