I took an early Roth IRA withdrawal yesterday because I overcontributed in 2024. I haven't received my 1099-R yet. How do I file this, given the deadline is today?

[mpinkham3]

The excess contribution was due to our MAGI; we contributed $6000 during the year. But we are not eligible for a "recharacterization" to a traditional IRA contribution because we didn't have a traditional IRA in 2024. My Roth IRA contact said the distribution/withdrawal to be processed in the next 11 business days, and I expect the 1099-R for it on the same timeline. I don't know whether this will count as having fixed the excess contribution prior to the deadline. I don't know what the calculated earn/loss on the excess value is, but my guess is that the 10% tax on it represents less than $50, whereas the 6% penalty on the excess is around $180. Basically, I don't know which number to put as my Roth IRA contribution for 2024, or whether to file an amendment regardless, or just to file an extension.

[MaryK4]

Because you removed the excess before the due date of the tax return, you do not have to report it on your tax return, or pay the penalty for excess contribution.  You will have to report the income earned for the excess contribution, but it will not be reported until next year on your 2025 1099-R.  If you know the amount, you can add it now so that you do not have to amend. 

If you made an excess Roth IRA 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.

[mpinkham3]

@MaryK4thank you for the detailed, prompt, and comprehensive reply! Much appreciated. I was able to file with confidence.