Excess Roth contribution

chr15to — Tue, 01 Apr 2025 08:06:41 GMT

I have excess contributions to my Roth IRA from 2021,2023 and 2024. I just realized that and withdrawn all the contributions plus gains from all the previous years. But since I did it only now, I will receive my 1099R only next year. I believe I have to pay the 6% on the 2021 and 2023 excess contributions. Should I wait for the 1099r from next year to do this or do it now ? If so, does the turbo tax product support this ?

Re: Excess Roth contribution

DanaB27 — Tue, 01 Apr 2025 10:49:27 GMT

For the 2021 and 2023 excess you should have taken a regular distribution without earnings since it is after the due date. You should get a 2025 Form 1099-R with code J (if you are under 59 1/2) since you withdrew the excess after the due date. This 2025 Form 1099-R will be reported on your 2025 return and resolve the excess contribution.

For the tax year 2024 you should have requested the withdrawal of excess contribution plus earnings. If you made the contributions in 2024 and withdrew them in 2025 then you will get a 2025 Form 1099-R with code P and J. This form has to be reported on the 2024 tax return and you have two options:

You can wait until you receive the 2025 Form 1099-R in 2026 and amend your 2024 return or
You can report it now in your 2024 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or Box 14 State withholding. Then you must enter the 2025 Form 1099-R into the 2025 tax return since the withholdings are reported in the year that the tax was withheld. The 2025 code P will not add anything to your income in the 2025 tax return but the withholdings will be applied to 2025.

To enter a 2025 Form 1099-R in your 2024 return please follow the steps below:

Login to your TurboTax Account
Click on the "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Answer "Yes" to "Did you get a 1099-R in 2024?"
Select "I'll type it in myself"
Box 1 enter total distribution (contribution plus earning)
Box 2a enter the earnings
Box 7 enter J and P
Click "Continue"
On "Is the IRA/SEP/SIMPLE box on this 1099-R checked?" screen answer "No, the box is blank"?
On the "Which year on Form 1099-R" screen say that this is a 2025 Form 1099-R.
Click "Continue" after all 1099-R are entered and answer all the questions.
Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2023" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2024.

Yes, you will have to pay the 6% penalty for the 2021 and 2023 excess on your 2021, 2022, 2023, and 2024 return. On your 2024 return:

Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
Select “Roth IRA”
Enter the Roth IRA contribution for 2024
On the "Do you have any Excess Roth Contributions" answer "Yes"
On the "Enter Excess Contributions" screen enter the total excess contribution from 2021 and 2023 (if it wasn't carried over).
Continue until the penalty screen and enter the 2024 excess contribution amount withdrawn.

Please see How do I amend my federal tax return for a prior year?

Re: Excess Roth contribution

chr15to — Fri, 04 Apr 2025 07:19:35 GMT

Thanks for the reply, is there any specific Turbo Tax product i need to buy to do this? like premier, deluxe, or any Turbo tax product would provide this?

thanks.

Re: Excess Roth contribution

AnnetteB6 — Fri, 04 Apr 2025 13:43:49 GMT

Any of the desktop versions will be able to handle this situation.

If you are using TurboTax Online, then the Deluxe version or higher would be a good choice.

@chr15to

topic Re: Excess Roth contribution in Get your taxes done using TurboTax

Excess Roth contribution

Re: Excess Roth contribution

Re: Excess Roth contribution

Re: Excess Roth contribution