I had excess Roth IRA contribution for 2016. I have removed the contribution prior to filing my tax return. The Net Income Attributable (NIA) was also distributed. I am under 59 1/2.
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The NIA is taxable and subject to a 10% early-distribution penalty. The NIA is taxable on the tax return for the year in which the excess contribution being returned was made. That would be the 2016 tax return if the contribution for 2016 was made in 2016 (code JP on the 2017 Form 1099-R) or on the 2017 tax return if the contribution for 2016 was made in 2017 (code J8 on the 2017 Form 1099-R).
To report a code JP 2017 Form 1099-R on your 2016 tax return, simply enter the Form 1099-R into 2016 TurboTax as if you have already received it:
Be sure to also enter the original Roth IRA contribution and indicate in the follow-up that you had the excess returned (do not include the NIA when entering the amount of excess that was returned).
The NIA is taxable and subject to a 10% early-distribution penalty. The NIA is taxable on the tax return for the year in which the excess contribution being returned was made. That would be the 2016 tax return if the contribution for 2016 was made in 2016 (code JP on the 2017 Form 1099-R) or on the 2017 tax return if the contribution for 2016 was made in 2017 (code J8 on the 2017 Form 1099-R).
To report a code JP 2017 Form 1099-R on your 2016 tax return, simply enter the Form 1099-R into 2016 TurboTax as if you have already received it:
Be sure to also enter the original Roth IRA contribution and indicate in the follow-up that you had the excess returned (do not include the NIA when entering the amount of excess that was returned).
dmertz,
I have read your replies and am impressed with your knowledge and your willingness to help folks out. I'm wondering if you are a CPA? My wife and I are both military and have made some similar mistakes in our Roth IRAs (excess contributing). We are in need of a CPA that we can retain to help us with our taxes from 2017 to current and future filings. I am trying to figure it all out but am struggling with all of the IRS publications and forms. Let me know if you can help. My e-mail is [email address removed] and I look forward to hearing from you.
Thanks,
-Tim
Not a CPA or any other type financial professional. I and my family members have just had many different types of retirement accounts and in the past have had financial institutions, particularly banks, and financial planners make a variety of mistakes regarding them. I've made it my goal to know as much about these types of accounts and the associated transactions and reporting as I possibly can so that I can avoid me and financial institutions making mistakes, some of which can be unrecoverable. Since I specialize in this area, I suspect that I am more knowledgeable on this subject than most CPAs.
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