How to amend previous years' tax return with form 5329 for excess Roth IRA contributions in 2020, 2021, 2022 and 2023?

[kaitech3]

My daughter contribute Roth IRA for 2020-2023. My wife and I file tax return every year with my daughter as our dependent. Since she has no income, we realize that her Roth IRA contribution are not allowed. We contacted our brokerage firm to withdraw the contribution.

As I understand that we need to file the amendments tax return 1040X for year 2020, 2021 ,2022 with form 5329 and 6% penalty.

I try to use turbo tax desktop version to amend 2020 return. There is no way I can enter my daughter's Roth IRA contribution since she is a dependent. Turbo Tax only shows up my wife and my name under 'Deduction & Retirement' section. Can any one help show me how to do that?

Can we just file the paper form of 5329 for year 2020,2021,2022 with penalty 6% penalty check? Do we have to file the 1040X form?

Thanks.

SC

[fanfare]

The proper way to file Form 5329 is attached to Form 1040-X.
Form 5329 can be mailed by itself only when you are otherwise not required to file a tax return.

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If I read your post correctly, here is described in great detail for another taxpayer the same situation

albeit with some extraneous issues you can ignore.

https://ttlc.intuit.com/community/after-you-file/discussion/excess-contribution-to-ira/00/3082275

Replace text "traditional IRA" with  "Roth IRA" and 5329 Part III with 5329 Part IV

@kaitech3 

[kaitech3]

Thanks a lot for the advice. 

My issue is the Turbotax software (desktop version). I can not enter my daughter's Roth contribution information anywhere. Since it is my daughter's excess contribution for the Roth IRA, I need to enter those amount under her name. Since she is filed as our dependent, Turbotax does not display her name under 'Roth IRA' section.  So I can NOT generate amend 1040X and 5329.

A workaround method I can think of:

I can enter my daughter's excess ROTH IRA contribution under my name and generate a 1040X form and a 5329 form.  After that, I need to manually change the 5329 form from my name to my daughter's name.  All the numbers on the form are the same.   (Of course I need to manually enter to the pdf form.  And print on the paper format.). I hope I can file the paper format 1040X with 5329 form for year 2020, 2021 and 2022.  And with 6% penalty check. 

Is there a correct way that I can enter dependent's ROTH IRA's contribution on Turbo Tax ?

Thanks.

SC

[fanfare · Accepted solution]

"I can not enter my daughter's Roth contribution information anywhere. "

You don't want to enter her Roth Contribution.

you want TurboTax to add Form 5329 Part IV to her tax return showing her Excess Contribution after you start the AMEND step.

You can do that with TurboTax Desktop by going to Forms Mode and opening Form 5329.

(With TurboTax Online, this is problematic, since it doesn't have Forms Mode.)

For 2020 start with Part IV Line 23,

Subsequent returns use line 18 also.

Your 2023 return will use Line 20. The easiest way to enter Line 20 is with override. you'll have to file on paper,

Otherwise, learn the imaginary 1099-R trick (another whole other topic).

For tax years before 2021, nobody has posted a succesful 1040-X e-file of those years in 2022 or 2023.

As far as I know, whether 2022 TurboTax can e-File 2022 1040-X in 2024 is unresolved on this forum.

Therefore, they would have to be mailed also. Maybe you will let us know the answer.

(I don't remember the exact year TurboTax started supporting 1040-X e-File )

Since "amount due" is changing, TurboTax should fill out Col A,B,C of Form 1040-X .

My other thread tells you which forms to send with your paper Form 1040-X.

@kaitech3 

[fanfare · Accepted solution]

Another important point;

when amending multiple years, mail each return in its own envelope.

@kaitech3 

[kaitech3]

I tried your method today. But it does not work.  I click the open form and search for 5329. It shows two links. One is the 5329 form under my name and SSN on the top line. The other one is the 5329 form under my wife's name.  I can not find a way to open a blank form that I can add my daughter's name and SSN.  

Any suggestions ? 

Thanks.

SC.

[kaitech3]

In addition to  amend the previous years 2020,2021 and 2022, the most difficult one is filing this year (2023)'s return. Since I will have to do efile for 2023 tax, I can't add a paper form 5329 with my daughter's name on.  (My daughter is still a dependent on my 2023's tax return.)