Overcontribution to Roth IRA

[Anonymous RK]

I over contributed to Roth IRA in July 2024 by $7000 and now while filing for taxes using turbo tax realize this.  I am working on withdrawing excess contributions plus any earnigns from my brokerage account as of today, April 7 knowing deadline for taxes is April 15!

Have few questions:

1. Do I wait to complete my taxes till that money is withdrawn from my Roth IRA?

2. I see I need to fill 1099-R.  If I can't get this form in time from my brokerage, how do I go about it with filling my taxes?

3. If I do fill for 1099-R then what do I need to put for my Roth IRA contribution while file my taxes as it is my only contribution to my Roth IRA for 2024. 

4. If there proper steps that I need to take?

[DanaB27]

1. If you want to avoid amending your return then you need to know the earnings withdrawn to enter a 2025 Form 1099-R. In this case you might want to wait to file your 2024 return. Please see How do I file an IRS tax extension?

If you made an excess 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.

2. 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.

3. Make sure you indicate in the IRA contribution interview that you withdrew the excess contribution by the due date:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. Enter the Roth IRA contribution
5. Continue until the penalty screen and enter the excess contribution amount withdrawn.