Re: How do I report an excess SEP IRA contribution...
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therannmann2000
New Member

How do I report an excess SEP IRA contribution which was withdrawn (+ earnings) before the tax deadline. The 1099-R wont be available until next year.

I contributed during 2020 and noticed it was in excess of the allowed amount in 2021.  The full amount with earnings was withdrawn, but it was done so after 1099-Rs went out.  I talked with Betterment support and they said 1099-Rs are sent for the year the transaction occurred, not the year the contribution was made.  But it seems like the IRS wants it reported now to avoid a penalty and I'm not sure how to report it without the 1099-R.  I know the capital gains amount but have nowhere to enter it.
1 Reply
WendyN2
Employee Tax Expert

How do I report an excess SEP IRA contribution which was withdrawn (+ earnings) before the tax deadline. The 1099-R wont be available until next year.

If you have the Federal ID number for Betterment and the amount(s) to enter, you would just go to the screen where you enter the SEP IRA contribution/withdrawals page and enter as if you do have the 1099-R. 

 

You only need to enter SEP IRA contributions made through self-employment work. If your employer made a SEP IRA contribution for you, then you don’t need to enter it in your return. (While you could contribute more to an employer-sponsored SEP IRA, TurboTax doesn’t support these contributions.)

 

Before you enter your SEP IRA contributions, first make sure you've entered self-employed income. This allows us to calculate the maximum amount you're allowed to contribute to your SEP IRA.

 

Once your self-employment income is entered:

  1. In your return, type SEP IRA contributions (use the whole phrase) in the Search box.
  2. Select the Jump to link at the top of the search results.
  3. This will take you to the Self-Employed Retirement Plans screen.
    • If you get a message that Self-Employed Retirement Plans are only for self-employed individuals, this means that you have not entered any self-employed income.
  4. TurboTax will ask you about whether you contributed to different types of retirement plans. Select Yes to Keogh, SEP, and SIMPLE Contributions.
  5. On the Your Contributions screen, you’ll be able to input your SEP IRA contributions.
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