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Level 2

Solved

Reporting earnings on Traditional IRA excess contribution

Forum|Forum|4 years ago
April 6, 2022
1 reply
0 views

I have removed an excess 2021 IRA contribution prior to filing my 2021 taxes. Where specifically in TT do I report the earnings from an excess IRA contribution? I know I am taxed and penalized (under age 59 1/2) on the earnings in 2021 but I don't know where to enter the earnings from the excess contribution. Can anyone help me out?

Best answer by ThomasM125

You would make an entry for a substitute form 1099-R and put the withdrawal amount in box 1 and the earnings in box 2(a). You will see an option to create a substitute form 1099-R on the screen that says Tell Us Which 1099-R You Have when you go to enter the form 1099-R. Code the substitute form 1099-R as "8" and "1" in box 7, for excess contributions plus earnings and early withdrawal.

[Edited 4/6/22 @ 8:22 PM PST]

ThomasM125Answer

Level 15

You would make an entry for a substitute form 1099-R and put the withdrawal amount in box 1 and the earnings in box 2(a). You will see an option to create a substitute form 1099-R on the screen that says Tell Us Which 1099-R You Have when you go to enter the form 1099-R. Code the substitute form 1099-R as "8" and "1" in box 7, for excess contributions plus earnings and early withdrawal.

[Edited 4/6/22 @ 8:22 PM PST]

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KT99Author

Level 2

That is super helpful. Thanks! ...and how do I handle the 10% penalty properly?

Level 15

Sorry! Also enter code 1 in box 7 for early distribution, no known exception.

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