I withdrew in early 2020 some excess Roth IRA contributions made in and for 2019, and corresponding earnings on this contribution, but I did not include the taxable earnings in my 2019 tax return. So I need to amend this return.
I read elsewhere on this forum that one usually files the amended return when the 1099R is received the following year.
However, since I already know the content of box 1 and 2a for the upcoming 1099R based on what my bank returned (and I confirmed the earnings amount independently using the Worksheet 1-4 formula in Pub. 590-A, so quite confident it is correct), I am wondering if there is any caveat in filing an amended return now, with code J8 (in TT 2019 amendment software) , and then ignore the 1099R next year.
Thanks.
PS: I will also be removing 2017 and 2018 excess contributions later in the year (and file corresponding 5329 forms for the 6% penalty), but as I understand it that should not have any bearing on amending my 2019 tax return.
You'll need to sign in or create an account to connect with an expert.
@ae7943 wrote:
if there is any caveat in filing an amended return now, with code J8 (in TT 2019 amendment software) , and then ignore the 1099R next year.
Yes there are.
1) There is no reason to amend before you receive the 1099-R and if the 1099-R is not what you think it will be then you will have to amend again which is messy.
2) If you amend with a 1099-R code J8 then it would be incorrect and would require amending again. Code J8 is not for a 2019 return of earnings returned in 2020. It would probably be a code PJ. (Code J8 on a 2020 1099-R says it is a 2020 contribution returned in 2020 and cannot go on a 2019 tax return).
3) If you did not specifically instruct the IRA trustee that this was a"return of excess contribution" and not just a normal distribution then the 1099-R might not be coded as a return of contribution at all.
All in all, I never recommend amending before the actual 1099-R is received - there is no good reason to do so.
@ae7943 wrote:
PS: I will also be removing 2017 and 2018 excess contributions later in the year (and file corresponding 5329 forms for the 6% penalty), but as I understand it that should not have any bearing on amending my 2019 tax return.
Note, if you do not know:
The 6% penalty repeats each tax year that is it in the IRA.
For the 2017 excess there will be a 2017 and 2018 and 2019 6% penalty,
and for the 2018 excess, a 2018 and 2019 6% penalty.
You need to file a 5329 for each year.
There will be no 2020 penalty if both excess are removed before the end of 2020 as a "normal" distribution of the excess only, not the earnings, which can remain because the penalty is paid. There will be no tax on the distribution since it is your contributions - just the penalties.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
SoCalRetiree
New Member
ayubruin7777
Level 1
Andy_W
Level 1
erikaeriga
New Member
jjyoo92
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.