Must fix my excess 2018 roth ira contribution. timeline: deposited $5500 4/19 but didn't invest it until 7/1/19. I'm removing excess + little earnings. What do I do now?

[dmulchand]

I'm confused by what I need to do for my 2018 tax return by the October 2019 deadline (if anything?) because I contributed for the 2018 tax year IN 2019 before I filed my taxes. To be clear, I only deposited $ when I contributed. I began investing those funds beginning of July 2019. So, the earnings are honestly very, very little. I just don't know if I need to file an amended return by October and how I even go about doing so. Any help is much appreciated!

[macuser_22]

Assuming that you asked the IRA custodian for a return of excess contribution then they will return the excess plus any earnings.    Since the excess was withdrawn in 2019, you should receive a 2019 1099-R with a code "PJ" in box 7, the excess in box 1 and the earnings in box 2a.   Because this was a contribution *for* 2018, the earnings are taxable in the 2018 tax year.

That will require amending 2018 to add the 2019 1099-R to the 2018 tax return (TurboTax will ask what year the 1099-R is for - 2018 or 2019).     There is no need to amend now before you receive the 2019 1099-R (usually after January 31, 2020).  You have 3 years after the April 15, 2019 due date to amend a 2018 tax return, but you should amend ASAP after you have the 1099-R in hand.

Trying to amend prior to receiving the actual 1099-R can lead to errors if the 1099-R is any different than you think it will be.

[dmulchand]

Thank you SO much for clarifying! I really appreciate it.