I had an excess contribution to my Roth IRA in the 2017 tax year that was removed on time. I reported a mock 2018 1099-R on my 2017 tax return so I would not have to amend it.
I received my actual 2018 1099-R and wanted to make sure the correct information was relayed on my mock 1099. Should my 1099 box 1 be in 15a on my 1040 and 1099 box 2a be in 15b on my 1040?
There are codes P/J in box 7, but everything else was left blank on my real 1099. Is there a way to know if I reported those codes and everything else correctly? There is the "other tax" on line 59 of my 1040 and on form 5329 that derives from my box 2a(form 1040 15b) - the taxable amount. I believe that should stem from reporting the correct P/J codes. Any other way to verify?
Thanks!
Yes, you are correct, the box 1 from Form 1099-R would be in 15a and box 2a be in 15b on your 2017 Form 1040. And yes you would have an "other tax" on line 59 that is carried over from Form 5329.
The "other tax" comes from my 1099 2a/1040 15b correct? That is what I see on my form 5329 --- lines 1 and 3 are the same as 1099 2a/1040 15b. That amount is subject to the 10% tax on line 4 of 5329, correct?. That is then the "other tax"? Sorry - I am just trying to make sure I understand!
Is there any way to verify I entered the correct codes? I must have entered P correctly otherwise I would not have been taxed on 5329 in the early distribution section(Part 1)? And J means it was a Roth IRA. Is there a way to verify that?
Code P indicates that it was taxable in the previous year, in your case the form is from 2018 but it is taxable in 2017. It seems that you entered the codes correctly since you had the correct results on form 1040.
To confirm, the earnings on an excess contribution to a Roth IRA are taxable in the tax year the contributions were made, correct? Not when they were removed? I contributed to a 2017 Roth IRA, but withdrew the excess contributions to that 2017 Roth IRA in 2018 prior to the tax due date. There were earnings on the excess contributions removed, but those are taxable in 2017 and NOT 2018 because I made contributions during the 2017 tax year. Is that correct?
What would happen if someone contributed in 2018 to their 2017 Roth IRA prior to the deadline(in January 2018 for example), but those 2018 contributions to their 2017 IRA were in excess and removed prior to the deadline(in March 2018 for example)? If there were earnings would that still fall under taxable in 2017 because it was contributions to a 2017 Roth IRA?
Yes the are taxable in 2017 because the contributions were made during the 2017 tax year. Yes, also to your 2nd question. The earnings would that still fall under taxable in 2017 because it was contributions to a 2017 Roth IRA.
On my 2017 return, I have two 1099R that both have taxable amounts in box 2a as a part of the total disctribution. How can I confirm that the amount was included in my total taxable income? My 1040 does not show anything on line 15b.
The distributions would show on line 15b only if the IRA/SEP/SIMPLE box below line 7 on your 1099-R was marked.
A taxable amount might not show if you had basis in the IRA. The taxable amount of your IRA distribution is calculated on Form 8606, so I suggest you look there.
"The distributions would show on line 15b only if the IRA/SEP/SIMPLE box below line 7 on your 1099-R was marked."
... or box 7 includes code J (or in certain circumstances, code T).
The Box 7 Distribution Code(s) 1st code has a "2".
The Box 1 amount $70K. Box 2a taxable amount has $15K. Total distribution is marked "X".
Where does the $15K get added into the total taxable income ?
markx2, a code 2 Form 1099-R with a different amount in box 2a than is in box 1 is not reporting a distribution from an IRA, so this Form 1099-R would not have the IRA/SEP/SIMPLE box marked and the distribution would appear on 2017 Form 1040 line 16, not line 15. You should see $70k included on line 16a but only $15k included on line 16b.
OK. So box 16a has the $70K, included with a second 1099R amount. But line 16b has "ROLLOVER" added to the line and $0.00 as the amount. Am I correct to assume that the 2017 turbotax software did not correctly carry the amount from the 1099 R form to the 1040 line 16b? Which means my taxable income was under-reported by the $15K?
$0 on line 16b with the word ROLLOVER next to line indicates that you told TurboTax that rolled at least $15k over to another traditional qualified retirement account like a traditional IRA.
Are there any amounts shown in boxes 5 or 6 of this Form 1099-R? If so, what are the amounts?
Yes. Box 5 is blank. Box 6 has $55k.
Box 1 $70,684.39
Box 2a $15,439.35
2b Taxable amount not determined - blank
Total Distribution marked "x"
Box 6 $55,245.04.
OK, this was a distribution of employer stock that included Net Unrealized Appreciation. Given the amount of NUA, it seems that you would not have rolled over this distribution, yet that's apparently what you told 2017 TurboTax that you did. If you did not roll any of this distribution over you would need to amend your 2017 tax return to correct the reporting and pay the additional tax due.