Withdraw excess Roth IRA 20

[Hdtax]

Hello,

I am new at this community. I have been reading the post on this topic.

i would like to review my case to make sure I understand the process.

-  I contributed $4000 to Roth on January 1st , 2023. Earning $400. I notified Vanguard to request the return of this distribution. They withdrew the fund and also the withholding for federal at 32% and state at 9%

I would enter the 1099-R with the total distribution in box 1 (the contribution plus the earnings),, $4400
The earnings in box 2a, $400
Enter code "P" in box 7 (Top) - Add another box7 for code J.. “ which year” 2024.

Another Reason" box to eliminate the 10% early withdrawal penalty $400, I am over 65.

i am kind of confuse after this. I will receive a 5478 about this contribution from Vanguard in May 2024 ?.. even it get fixed. ?
In January 2025, I will receive the 1099 R. For the tax 2024.   What do I have to do with this ?

For the state CA, what do I need to do? Can you give me the steps.

I really like this community. The answers are quite clear . I learned from this.

I  am kind of worry and mad at myself to make this mistake . I am using TT for tax. Trying to correct it.

 Thanks 

[ThomasM125 · Accepted solution]

You will receive a Form 1099-R from your broker reporting distributions in the year you received them. So, if the ROTH IRA money you contributed in January of 2023 was refunded in 2024, then you will receive a Form 1099-R for 2024 and you have reported everything correctly. When you receive the Form 1099-R in 2025, dated 2024, you will enter it in TurboTax and there will be a code P on it which will indicate the income belonged in 2023. Since you already reported it in 2023, you don't need to do anything further.

Once you enter the 1099-R in the federal portion of TurboTax, it should flow down to the California return so you just need to answer any questions you may see there that pertain to it.

You will likely receive a form 5498 reporting the IRA contribution even though it was returned to you. 

[fanfare]

@Hdtax 

Your age does not matter

There is never a penalty to take a contribution out of your Roth account.

The 10% penalty on the allocable earnings has been removed.

[Hdtax]

Thank you