By mistake, I opened a ROTH IRA account and made 1000 dollar contribution in 2020 and then realized the mistake and close the account. at the time of withdrawal amount is 1045.26.
I received 1099 R from a broker and it mentioned
Column 1 Gross distribution is 1045.62
Column 2 Taxable amount Blank
Column 2b Checked (Taxable amount not determined)
Column 7: Code is J (indicates that there was an early distribution from a ROTH IRA. )
Now Turbotax is adding a tax on the whole amount. please suggest me.
I have Tubo Premier desktop version 2020
and the taxable amount is blank.
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@gagan5987 wrote:
By mistake, I opened a ROTH IRA account and made 1000 dollar contribution in 2020 and then realized the mistake and close the account. at the time of withdrawal amount is 1045.26.
I received 1099 R from a broker and it mentioned
Column 1 Gross distribution is 1045.62
Column 2 Taxable amount Blank
Column 2b Checked (Taxable amount not determined)
Column 7: Code is J (indicates that there was an early distribution from a ROTH IRA. )
Now Turbotax is adding a tax on the whole amount. please suggest me.
I have Tubo Premier desktop version 2020
and the taxable amount is blank.
You should have requested a "return of contribution" and your 1099-R would have a code 8J, but just enter the 1099-R you have. A $1,000 is your own contribution that is not taxable but the $46 is taxable and also subject to a 10% penalty ($4.60 - rounds to $5) if you are under age 59 1/2.
I don't have I099T, What I can do now? Turbotax calculating penalty and tax,
"T" was a typo.
@gagan5987 wrote:
I don't have I099T, What I can do now? Turbotax calculating penalty and tax,
Your own $1,000 contribution is not taxable - only the $45 is and subject to ta 10% penalty if under age 59 1/2.
You can always withdraw your own Roth contributions tax and penalty free.
Enter a 1099-R here:
Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).
OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.
Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.
[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]
One of the followup questions will ask for your prior year** contributions not previously withdrawn. Those contributions that still remain in the Roth will not be taxed or subject to a early withdrawal penalty. That will add a 8606 form to your tax return with the Roth contribution and tax calculation in part III.
Note: **Prior year - any current year Roth contributions should be entered into the IRA contributions section. They will not show up in the prior years contributions but will be accounted for on the 8606 form that calculates the taxable amount.You can always withdraw your own Roth contributions tax and penalty free.
Enter a 1099-R here:
Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).
OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.
Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.
[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]
One of the followup questions will ask for your prior year** contributions not previously withdrawn. Those contributions that still remain in the Roth will not be taxed or subject to a early withdrawal penalty. That will add a 8606 form to your tax return with the Roth contribution and tax calculation in part III.
Note: **Prior year - any current year Roth contributions should be entered into the IRA contributions section. They will not show up in the prior years contributions but will be accounted for on the 8606 form that calculates the taxable amount.
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