Need to remove Form 5329 from my tax return.

[acl78707]

While completing my 2014 tax return I realized I had an excess contribution to my Roth IRA.  So in 2015 I removed the excess contribution and paid taxes on earnings etc .  When I went to complete my 2015 tax return, I neglected to fill in Line 20 of form 5329 to show the excess contribution was removed.  So I filled a 1040X (2015 Return) outside Turbo Tax to recoup the additional tax I paid as a result.  Because I did not complete the 1040X in Turbo Tax, while completing my 2016 Tax Return, Turbo Tax does not recognize that I withdrew the excess contribution and continues to prompt me for Form 5329.  Is there any way to correct this within Turbo Tax so when I complete next years (2017) tax return, it does not prompt me to fill out Form 5329? Hope this is clear.  Thanks
Andy

[ChristineT]

To delete form 5329 for TurboTax online follow these instructions:

1. At the top of your page hover over "My Account"
2. Click on "Tools"
3. Click on "Delete A Form"
4. Scroll down and find "Form 5329" and click on delete next to it

To delete form 5329 from TurboTax Desktop follow these instructions:

1. Go into Forms mode by clicking "Forms" in the top right corner
2. Scroll through the forms in your return
   
3. Select "Form 5329"
4. Select "delete form" box at the bottom of the screen

[macuser_22]

Until the excess contribution is removed the 5329 form will just come back.

Use the IRA contribution section and click on Roth contribution. Click through the interview until, the excess comes up and enter 0 (zero) in the box.  That should remove the excess from both the carry over worksheet and the 5329 form.

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR  Use the "Tools" menu  (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.

[Chaulk]

I had a Roth ira for a a few days  and recharacterized to traditional before taxes were due for 2018. I got 2019 Form 1099R been trying to amend but filling it out  has been a mess. 

[macuser_22]

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@Chaulk wrote:

I had a Roth ira for a a few days  and recharacterized to traditional before taxes were due for 2018. I got 2019 Form 1099R been trying to amend but filling it out  has been a mess. 

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A 2019 1099-R with a code R in box 7 (Recharacterized IRA contribution made for 2018 and recharactorized in 2019) will tell you that you must amend 2018.

A code R 1099-R does nothing whatsoever if entered into the 1099-R section of an amended 2018 return. It does not get sent to the IRS and nothing goes on the tax return at all. The only purpose of the 1099-R is to report the recharacterization to the IRS, but it still must be reported on your 2018 tax return.

The box 1 on the 1099-R will report the total recharacterized amount (contribution plus earnings) but it does not separately report the earnings and box 2a must be zero.

The proper way to report the recharacterization and earnings which is to enter the 2018 IRA contribution in the IRA contribution interview section and then say yes to "Did you switch from a Roth to a Traditional IRA - recharacterize".

The amount The amount of the original Roth contribution must be entered - not any earnings or losses.

Then TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharactorized.

There is no tax or penalty on the before-tax earnings since the earning were simply switched into the recharactorized account.

That is the only way to prepare and attach the proper explanation statement for a code R 1099-R.

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.

Since the after-tax Roth contribution is now a Traditional IRA contribution it can be either a before-tax deduction if your MAGI allows a deduction which might result in an additional 2018 refund, or it will be an after-tax contribution reported on a 8606 form (line 1 & 14) as a "basis" in the Traditional IRA that will reduce the tax of future distributions.

[loreann79]

the advice below for TurboTax desktop does not work.  do you have additional advice?

I purpose the solution to add answer to question - did you take RMD? - RMD not required in addition to Yes and No.

Robert Shanley

[macuser_22]

Delete the 1099-R you entered and re-enter.

Answer the RMD question that "None of this distribution was a RMD" or"RMD not required" depending on the TurboTax version - because it was NOT a RMD, there were no 2020 RMD's.

If this is an inherited IRA then answer the "Is this IRA inherited" with NO. The purpose of that question is to PREVENT rolling an inherited IRA over, buti is allowed for 2020 only.

Then you will get the screen to say it was "moved" and all rolled over.

That will put the 1099-R box 1 amount on the 1040 form line 4a with the word ROLLOVER next to it.