Amending a Return to Account for Excess Roth IRA Withdrawal

[AmendedQuestioner]

Hello Intuit Community!

I contributed to my RothIRA in:

• June of 2022 (for 2022 contributions)
• January of 2023 (for prior year, 2022 contributions)
• July of 2023 (for 2023 contributions)

I have since realized I was not eligible to contribute in 2022 or 2023. I have now completed a withdrawal of the 3 contributions AND any earnings they made as of July 2023. Prior to this realization and withdrawal, I already filed my 2022 taxes (done in February 2022).

My questions are:

1. Can I do anything between now and October 16th (IRS extension) to amend my 2022 tax return and address the 2022 contribution and withdrawal with earnings?
2. What should I plan to do when I'm filing 2023 taxes to address the two contributions made in 2023?

I appreciate any help the team can provide!

[TaxLadySusan]

Thank you for your question.  This happens to a lot of taxpayers.  Since you withdrew the excess contribution for 2022 you will be okay.  You will need to file an amended 2022 tax return by October 15th in order to avoid the 6% penalty.  The interview in the amendment will prompt you to enter how much you withdrew and when you withdrew it.  We can help you with that if you need us. You will receive a 1099 R for the distribution in 2023.  On the 2023 return you will report the contribution and the distribution for the 2023 excess contribution.  Feel free to call us for assistance if you need help.

[AmendedQuestioner]

Hi @TaxLadySusan Thank you for your reply! When amending my 2022 Tax Return to report earnings made on my contributions (withdrawals), how and where do I report that on the amended tax return? Is there a separate form I need to complete or is it a section of an existing form I would have already submitted?

Thank you again for your time and input!

[TaxLadySusan]

You will be amended to show that you withdrew the original contribution.  The 1099 R you receive next year will have the taxable amounts in box 2.  No need to worry about the earnings just yet.

When you go into the amendment you will go to IRA contributions under deductions and credits and follow the prompts until you get to the question, will you or have you withdrawn the excess.  Keep going through the enter interview and run the review to be sure there are now outstanding items. I hope this helps!  You can always call us and have an expert help you through it.