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MDF
Level 5

How do we report excess contributions to Roth IRA accounts made in 2017 and 2018? In both years, the excess contributions were removed (and their gains) before the April 15th deadline. For the 2017 ta

 
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Level 20

How do we report excess contributions to Roth IRA accounts made in 2017 and 2018? In both years, the excess contributions were removed (and their gains) before the April 15th deadline. For the 2017 ta

For 2018 see below.  For 2017 it is the same but  change the years in the directions below an amended  2017 tax return.

*IF* you requested a return of contributions due to an excess contribution and the excess was removed before the extended due date of the 2018 tax return and the earnings were also returned and you know that the IRA custodian will report this as a return of contribution and not as a normal Roth distribution - then:

You can just report it now and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or box 12 State withholding. Then you must also enter the 2019 1099-R into the 2019 tax return since the withholding is reported in the year that the tax was withheld. The 2019 code P will not do anything in 2019 but the withholding will be applied to 2019.

You would enter the 1099-R with the total distribution in box 1 (the contribution plus the earnings),

The earnings in box 2a,

Enter code "P" in box 7 (Top) - don t worry that it will say "taxable in 2017 "

Enter code "J" in box 7 (Bottom).

On the "Which year" screen say that this is a 2019 1099-R.

After the 1099-R summary screen press continue.

If you are over 59 1/2 then on the "Lets see if we can lower your tax bill" enter the box 2a amount in the "Another Reason" box to eliminate the 10% early withdrawal penalty on the earnings.

Enter the explanation for the excess contribution and that you are reporting a 2019 1099-R on your 2018 tax return to avoid having to amend in 2019.

The box 2a earnings will be taxable income reported on line 4b on the 1040 form and if under age 59 1/2 will also be subject to a 10% penalty on a 5329 form that will be reported on line 59 on the 1040 Schedule 4 form.
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MDF
Level 5

How do we report excess contributions to Roth IRA accounts made in 2017 and 2018? In both years, the excess contributions were removed (and their gains) before the April 15th deadline. For the 2017 ta

How do I report a loss? I contributed $3600 but my firm only return $3478.18 which includes a loss of $142.199.