I made an excess contribution in 2018 to my Roth IRA. In 2019, I requested to have the contribution reversed and received a check for it. I also had some earnings which had federal witholding applied.
Which route should I follow:
1) Do a dummy 1099-R now for my 2018 taxes ?
2) Get the "real" 1099-R and include it for my 2019 taxes (since federal withholding was applied)
3) #1 AND #2 above.
4) #2 and amend my 2018 taxes later?
Either #3 or #4, but maybe #4 rather than #3 because the Form 1099-R has tax withholding shown in box 4. Having tax withholding shown in box 4 generally causes TurboTax to include the details of the Form 1099-R in the e-filing, but I'm not sure if 2018 TurboTax will do that with a 2019 Form 1099-R the way it would with a 2018 Form 1099-R. If the payer information on your made-up Form 1099-R are not accurate, it could affect your ability to e-file.
Any amount of earnings distributed (a nonzero amount in box 2a) with the returned contribution are taxable and subject to early-distribution penalty (if you are under age 59½) on your 2018 tax return. The 2019 Form 1099-R will have codes P and J in box 7. (2018 TurboTax's drop-down text for code P will say "taxable in 2017," but the drop-down text assumes that you are entering a 2018 Form 1099-R, not a 2019 Form 1099-R. In the follow-up TurboTax will ask you if the form is a 2019 form.) Do NOT use code 8 because this will cause TurboTax to apply the tax withholding to the wrong tax year.
The tax withholding applies to your 2019 tax return even though the earnings were taxable on your 2018 tax return, so you must enter the 2019 Form 1099-R in 2019 TurboTax as well so that the box 4 amount is included on Form 1040 line 17.
For future reference, because the tax withholding in box 4 of a code P distribution applies to a different tax year than the taxable amount reported in box 2a, it usually makes sense to decline tax withholding on a code P distribution.
Either #3 or #4, but maybe #4 rather than #3 because the Form 1099-R has tax withholding shown in box 4. Having tax withholding shown in box 4 generally causes TurboTax to include the details of the Form 1099-R in the e-filing, but I'm not sure if 2018 TurboTax will do that with a 2019 Form 1099-R the way it would with a 2018 Form 1099-R. If the payer information on your made-up Form 1099-R are not accurate, it could affect your ability to e-file.
Any amount of earnings distributed (a nonzero amount in box 2a) with the returned contribution are taxable and subject to early-distribution penalty (if you are under age 59½) on your 2018 tax return. The 2019 Form 1099-R will have codes P and J in box 7. (2018 TurboTax's drop-down text for code P will say "taxable in 2017," but the drop-down text assumes that you are entering a 2018 Form 1099-R, not a 2019 Form 1099-R. In the follow-up TurboTax will ask you if the form is a 2019 form.) Do NOT use code 8 because this will cause TurboTax to apply the tax withholding to the wrong tax year.
The tax withholding applies to your 2019 tax return even though the earnings were taxable on your 2018 tax return, so you must enter the 2019 Form 1099-R in 2019 TurboTax as well so that the box 4 amount is included on Form 1040 line 17.
For future reference, because the tax withholding in box 4 of a code P distribution applies to a different tax year than the taxable amount reported in box 2a, it usually makes sense to decline tax withholding on a code P distribution.
Thanks - given I'm under 59 1/2 and thus would need to pay both the penalty and tax on the earnings - do I just not do anything for now?