topic Excess Roth IRA Contribution in Get your taxes done using TurboTax

Excess Roth IRA Contribution

eussrik — Fri, 19 Mar 2021 01:05:54 GMT

In January of 2020, I deposited money into Roth IRA. In March of 2020, I realized I had

contributed too much, so I filed a return of excess contribution.

I'm filing my taxes for 2020 now. I'm assuming I should not have to pay a penalty for the Roth

IRA withdrawal since I filed a return of excess?..if so how do I enter the 1099-R? The 1099R I

received has box 7 as 8 and J.

Would I enter only a substitute 1099-R? Or is there something else I need to do?

Thanks.

Re: Excess Roth IRA Contribution

DanaB27 — Sat, 20 Mar 2021 13:51:33 GMT

No, you will not have the 6% excess contribution penalty because you removed the excess contribution plus earnings. When TurboTax asks on the penalty page during the IRA contribution interview then enter the excess contribution amount you withdrew.

If you are under 59 1/2 you will have to pay the 10% early withdrawal penalty on the earnings your removed with the excess contribution.

You will enter your 1099-R 2020 with codes 8 and J into TurboTax and do not need a substitute 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”

Re: Excess Roth IRA Contribution

eussrik — Sun, 21 Mar 2021 15:34:49 GMT

Thank you.

i enter the info from my 1099R, with code 8J, then i see a screen:

Based on the 1099-R Box 7 code that you entered, it looks like you may need to pay extra taxes on this distribution.

I proceed further and it asks to "explain the return of contribution" ...below it says 'you told

us you received a return of contribution before Apr 2021."

is it asking why i returned the excess?

Re: Excess Roth IRA Contribution

DanaB27 — Sun, 21 Mar 2021 15:44:11 GMT

Yes, it is asking why you returned the contribution. Please enter "Return of excess contribution plus earnings to avoid the excess contribution penalty".