topic Roth IRA excess contribution from 2019 in Retirement tax questions

Roth IRA excess contribution from 2019

bigboybun — Tue, 02 Mar 2021 01:35:38 GMT

I contributed $6000 to a Roth IRA in 2019 but recently realized I was not eligible to make any contributions. I withdrew the contribution in Feb 2021. Do I need to report the withdrawal on my 2020 or 2021 tax return? How do I enter this in TurboTax? I understand I will have a 6% penalty for 2019 and 2020.

Re: Roth IRA excess contribution from 2019

macuser_22 — Tue, 02 Mar 2021 01:43:36 GMT

Enter the contribution into the 2019 IRA contribution interview on an amended 2019 tax return to produce a 5329 with the excess and a 6% 2019 penalty.

Do the same for 2020 and say the excess was not removed for another 2020 5329 with the 2020 6% penalty.

You will receive a 2021 1099-R to report the removal on yiur 2021 tax return next year.

Re: Roth IRA excess contribution from 2019

bigboybun — Tue, 02 Mar 2021 02:04:19 GMT

Thank you @macuser_22. Can I complete the amended tax returns using TurboTax if I did not file my 2019 and 2020 tax returns through TurboTax?

Re: Roth IRA excess contribution from 2019

macuser_22 — Tue, 02 Mar 2021 02:10:36 GMT

@bigboybun wrote:

Thank you @macuser_22. Can I complete the amended tax returns using TurboTax if I did not file my 2019 and 2020 tax returns through TurboTax?

Possible but not easy - you must purchase the software for those years and duplicate the filed return exactally - errors and all. Then print for filing so TurboTax things you paper filed. Then you can amend.

2017-2019 software can be purchased here:
https://turbotax.intuit.com/personal-taxes/past-years-products/

2019 and earlier can only be amended with TurboTax using the CD/download version installed on a PC or Mac computer.

See this TurboTax FAQ for detailed amend instructions:
https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed

Re: Roth IRA excess contribution from 2019

bigboybun — Tue, 02 Mar 2021 02:25:09 GMT

Sorry I misspoke earlier. I did not use TurboTax for 2019, but have not filed for 2020 and plan to use TurboTax. Does that mean I only need an amended return for 2019? Where can I report the excess for 2020 since I haven't filed yet?

Re: Roth IRA excess contribution from 2019

bigboybun — Thu, 04 Mar 2021 23:01:04 GMT

Hey @macuser_22, following up on my previous question.

For my 2020 return in TurboTax, under Federal Taxes -> Deductions & Credits -> Traditional & Roth IRA contribution, I entered $6000 in the field "Excess Roth IRA Contributions for Prior Years." When I preview Form 1040, schedule 2 line 6 has a value of $360.

Does that mean the 5329 was generated and I don't need to complete an amended return for 2020?

Thanks again for all the help.

Re: Roth IRA excess contribution from 2019

macuser_22 — Thu, 04 Mar 2021 23:42:17 GMT

@bigboybun wrote:

Hey @macuser_22, following up on my previous question.

For my 2020 return in TurboTax, under Federal Taxes -> Deductions & Credits -> Traditional & Roth IRA contribution, I entered $6000 in the field "Excess Roth IRA Contributions for Prior Years." When I preview Form 1040, schedule 2 line 6 has a value of $360.

Does that mean the 5329 was generated and I don't need to complete an amended return for 2020?

Thanks again for all the help.

$360 would be 6% of the $6000 excess so it appears that you already entered it for 2020 of further action not necessary.