ROTH IRA Excess Contribution

Forum|Forum|5 years ago
March 7, 2021
1 reply
5 views

In the year 2020, I contributed too much to my ROTH IRA. I went to my brokerage to get it fixed. They were able to remove the excess along with the earnings and add them to my contributions for the following year. I have a couple of questions.

a) When I file my taxes, do I report the amount I contributed INCLUDING the excess or do I report the new fixed amount that EXCLUDES the excess contribution?

b) Do I need to report my earnings from the excess even though there were simply carried into the next year?

c) What fees do I have to worry about?

Not A Product Question

DanaB27

Level 15

a)When you enter your Roth contributions it gives you the option on the “You have currently a penalty” screen to enter how much of the excess contribution you withdrew. Please enter the whole amount contributed in the Roth IRA contribution interview and then enter the amount of excess contribution withdrawn (no earnings).

b)Yes, you will have to report the distribution of the excess contribution and earnings. Please follow these steps to create 1099-R:

Login to your TurboTax Account
Click on the Search box on the top and type “1099-R”
Click on “Jump to 1099-R”
Select "I'll type it in myself"
Box 1 enter total distribution (contribution plus earning)
Box 2 enter the earnings
Box 7 enter P and J
On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.

c)You will have an 10% early withdrawal penalty on the earnings.

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Jcarace5

Level 2

Hello,

Follow up on this topic. While filing for 2020 tax year. In turbo tax I entered the amount of excess contribution of $6000. It then asks "Contributions withdrawn before the due date". My question is, do I just enter the $6000 contribution amount, or do I also include earnings that were withdrawn? For example if I made $1000, do I enter just the $6000 contribution amount or do I enter $7000 in that field? Thank you.