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Started and cancelled Roth IRA, do I enter anything?

In August of 2022 I started a Roth IRA.  I am disabled and didn't realize my distribution from my employer counted as a pension distribution and only my small disability insurance payment counted as wages.  So I accidentally overfunded the account.   Since I realized I would never be able to contribute much to the Roth IRA I just pulled everything out and and closed it completely this week instead of just pulling out the overage.  I didn't have any gains, in fact, I lost a little money with the attempt to save for the future. 

 

I didn't receive any form for the 2022 year, but I had started my 2022 taxes and answered that I put money in a Roth IRA which is what alerted me to the fact I was overfunding it.  So I have been waiting to file.  Should I simply change the funding answer to say I didn't put anything in a Roth IRA?  And is there there anything special I will need to do in the 2023 tax year?

 

 

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1 Reply
ThomasM125
Expert Alumni

Started and cancelled Roth IRA, do I enter anything?

Since you don't have any gain on the ROTH and you withdrew the funds before the due date of your tax return, there won't be any tax to pay on it in 2022, so you don't need to report the distribution on your 2022 tax return. You should go back and correct the entry reporting the IRA contribution. For 2023 you will get a form 1099-R in 2024 reporting the distribution, with the amount returned in box 1 and a code P in box 7. When you report this in TurboTax, it will not show as taxable on your 2023 tax return.

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