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@JonBoy69 wrote:
Got it. Would the 8606 need to be filed with the 2020 return or next year with the 2021? I assume the 8606 would need to report the excess in one of the years.
There is no 8606 for a return of contribution. A "return of contribution" is as if the contribution never happened in the first place.
If you do not want to remove the contribution but just make it non deductible then an 8606 is filed for the tax year that the contribution was *for" - if it was a 2020 contribution then a 2020 8606 must be files as part of the 2020 tax return or amended 2020 tax return.
Best answer! VERY clear. Thank you.
One last question, early on in the 2020 tax year she withdrew $1100.00 as a normal distribution (before making the excess contributions). So now she will have to pay tax on the $1100.00 withdrawal. Can she somehow subtract that $1100.00 from the excess so as to make it a wash? She withdrew the $1100.00 early in the year in January.
Can she somehow subtract that $1100.00 from the excess so as to make it a wash? NOPE ... it doesn't work that way.
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