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New Member

I removed an excess ROTH IRA contribution before the tax filing deadline. Do I need to do anything more than update TT with the corrected amount to keep track?

I erroneously contributed more than allowed to my ROTH IRA in 2018. I mailed the proper form to the Financial Intuition, with a postmark before the tax filing deadline, with the instruction to remove the excess amount. Do I need to do anything more than update the final and correct amount in TT so it can track properly year to year. Thank you!

7 Replies
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Level 12

I removed an excess ROTH IRA contribution before the tax filing deadline. Do I need to do anything more than update TT with the corrected amount to keep track?

Yes, you can report the return of excess and earnings on this year's return.  You owe tax on the earnings (and a penalty if you are under 59.5) that must be reported on this year's return.  If you don't adjust for it now before you file, you will have to file an amended return if the return of excess includes any earnings.  You can enter the 1099-R that you will receive next year on this year's tax return, which will correct the excess and report the earnings income this year.  The IRA custodian won't send to you the code JP 2019 Form 1099-R until near the end of January 2020.   You'll need to report this on your 2018 tax return as if you have already received the Form 1099-R.:

  • Box 1 = total received back
  • Box 2a = earnings portion
  • Box 7 = codes J and P

In the follow-up, indicate that this is a 2019 Form 1099-R.  On Form 1040, TurboTax will include the excess contributions on line 4a, the earnings on line 4b, and will include an early-distribution penalty (10%) on the earnings on Form 5329 if you are under 59.5.

The Code P drop-down will say ''earnings/excess deferrals taxable in 2017'' but it means taxable in the previous year which is appropriate in your situation since this is a 2019 Form you are entering.  

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New Member

I removed an excess ROTH IRA contribution before the tax filing deadline. Do I need to do anything more than update TT with the corrected amount to keep track?

Thank you Dawn. I've been preparing my own taxes since 1967 but your detail has blown my hair back. I  reread your answer several times and will go at it again to determine whether I can understand it.
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New Member

I removed an excess ROTH IRA contribution before the tax filing deadline. Do I need to do anything more than update TT with the corrected amount to keep track?

The return was filed before I submitted the request to remove Excess Contribution form.
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Level 12

I removed an excess ROTH IRA contribution before the tax filing deadline. Do I need to do anything more than update TT with the corrected amount to keep track?

It is a confusing topic.......Since you have already filed, you will need to amend your 2018 return if there are any earnings on the excess + enter the 2019 1099-R  on next year's return.  See <a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p590a#en_US_2018_publink1000231027">https://www.irs.gov/publication...>
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New Member

I removed an excess ROTH IRA contribution before the tax filing deadline. Do I need to do anything more than update TT with the corrected amount to keep track?

Thank you. Your response, is helpful. I may not have provided enough specifics to give a more specific answer in my original thread. The link is also very helpful. My request to Financial Institution was "Postmarked" April 11, 2019. Do you have any idea whether or not they are compelled by code to use the postmark? Or may they record it as the date received? I appreciate your time and depth of your knowledge!
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Level 12

I removed an excess ROTH IRA contribution before the tax filing deadline. Do I need to do anything more than update TT with the corrected amount to keep track?

I would call as I do not believe the postmark matters; the funds have to be removed by 04/15, especially since that is how you filed your 2018 tax return.  If they don't remove it by Monday, your 2018 return not only needs the earnings income, it will need the 6% excise tax on the contributions as they will not be considered ''removed'' in time to avoid the penalty.  You should be able to talk to someone Monday and confirm they have the form and did or will remove it by the end of the day.  They should understand because this is a common issue they deal with every year at this time.
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New Member

I removed an excess ROTH IRA contribution before the tax filing deadline. Do I need to do anything more than update TT with the corrected amount to keep track?

Thanks for your continued help with this. I appreciate your time!