topic 1099-R due to over funding need to Amend Previous Taxes in Retirement tax questions

1099-R due to over funding need to Amend Previous Taxes

Ptrick52 — Sun, 09 Feb 2020 17:41:36 GMT

I got a 1099-R for 2019 taxes due to overfunding a 2018 Roth IRA. I had contributed too much in 2018, and when I was doing my taxes, I found this out. Because of that I had withdrawn the amount that was required before taxes were due in 2019 for the 2018 taxes. However, it appears I need to Amend my 2018 taxes. In doing so, I'm not exactly sure what needs to be changed.

Re: 1099-R due to over funding need to Amend Previous Taxes

DianeC958 — Sun, 09 Feb 2020 18:13:59 GMT

The 1099-R should have a code JP in box 7, the returned excess amount in box 1 and if there are any earnings the earnings show in box 2a which will be taxable income on line 15b on the 1040 form and also subject to a 10% early distribution penalty if you are under age 59 1/2. This goes on your amended 2018 tax return. In the interview you select that it is a 2019 1099-R, not 2018.

And the 1099-R will be a 2019 1099-R received next January in 2020 (not 2019). Nothing goes on your 2018 tax return.

Re: 1099-R due to over funding need to Amend Previous Taxes

Ptrick52 — Sun, 09 Feb 2020 20:00:35 GMT

Still looking for clarification:

Since I currently have a 2019 1099-R, box 1 with $800, Box 2a $0.00, Box 2b unchecked, Box 7 PJ. This was due to maxing out 2018 Roth at $5,500 earlier in 2018, and having made too much at the end of 2018, where I had to get a portion refunded.

Question 1: Am I required to Amend 2018 taxes. Note: It appears in reviewing 2018 taxes "IRA Contrib Wks" the amount has already been subtracted.

Question 2: I do not see a line 15b on 1040 (2018); only line 15.

Question 3: Do I need to do anything to my 2018 taxes (amend), since 2019 1099-R, line 2a is $0.00.

Re: 1099-R due to over funding need to Amend Previous Taxes

DanaB27 — Sun, 09 Feb 2020 20:36:39 GMT

Generally, on the 1099-R the code P indicates "Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2018", and you will have to amend your 2018 tax return to enter the 1099-R unless you already had "created" a 1099-R when you filed your 2018 taxes last year.

In 2018 the IRA taxable amount would be on line 4b (15b is for years prior to 2018).

Since your 1099-R has $0 in box 2a it will not change your taxable amount on your 2018 tax return. Any amendment would be only informational.

Re: 1099-R due to over funding need to Amend Previous Taxes

Ptrick52 — Sun, 09 Feb 2020 20:46:23 GMT

Perfect answers - Thank you so much! Additional questions we are almost there:

Question 4: 2019 1099-R should be filed under 2018, and then Amend the tax return.

Question 5: Should I remove the 1099-R from the 2019 filing since, I'm filing it under 2018, or file it with both 2019 and 2018.

Question 5: Do I amend both federal and state returns for 2018.

Re: 1099-R due to over funding need to Amend Previous Taxes

DanaB27 — Sun, 09 Feb 2020 21:02:14 GMT

Yes, the 2019 1099-R with code P will be filed under 2018.

You do not need to waste your time to delete the 1099-R from your 2019 tax return because the code tells TurboTax to ignore it. But if you prefer to delete it please follow these steps:

Login to your TurboTax Account
Click on the Search box on the top and type “1099-R”
Click on “Jump to 1099-R” and you should see the “Your 1099-R Entries” screen
Delete the 1099-R

Yes, you would amend both returns.

You are welcome.

Re: 1099-R due to over funding need to Amend Previous Taxes

Ptrick52 — Sun, 09 Feb 2020 21:15:19 GMT

Perfect! Thank you so much!

Re: 1099-R due to over funding need to Amend Previous Taxes

Ptrick52 — Sun, 09 Feb 2020 21:32:35 GMT

Something still doesn't seem right in filling out 1099-R as a part of the 2018 amending. 2018 1099-R, Box 7, when I select "P" it states "P-Return of contribution taxable in 2017." This is for contribution made in 2018, not 2017. Also I have a 2019 1099-R, which doesn't seem reasonable to create a 2018 1099-R.

Re: 1099-R due to over funding need to Amend Previous Taxes

DanaB27 — Sun, 09 Feb 2020 22:08:54 GMT

After you entered the 2019 1099-R in your 2018 tax return, TurboTax should ask "Which Year on Form 1099-R?" and give you the option to select 2018 or 2019. Select 2019 and TurboTax will calculate it correctly.

Re: 1099-R due to over funding need to Amend Previous Taxes

Chaulk — Mon, 24 Feb 2020 19:13:59 GMT

this same thing happened to me while I am filing my 2019 taxes. It asks if the 1099 R is for 2019 or 2020. It is for 2019 I thought but now it asks me to ammend 2018. There is only a distribution code R on my return in box 7

Re: 1099-R due to over funding need to Amend Previous Taxes

DanaB27 — Mon, 24 Feb 2020 20:27:59 GMT

The code R means: Recharacterized IRA contribution made for 2018 and recharacterized in 2019. Therefore, you need to amend your 2018 return. Please see How do I amend a 2018 return in TurboTax?.

To report the recharacterization and earnings you will enter the 2018 IRA contribution in the IRA contribution interview section and then say "yes" to the question "Did you switch from a Roth to a Traditional IRA - recharacterize" and enter the original contribution amount.

Login to your TurboTax Account
Click "Federal" from the left side of your screen
Click “Deductions &Credits” on the top
Scroll down to “Traditional and Roth IRA Contributions” and click “Edit”

Re: 1099-R due to over funding need to Amend Previous Taxes

Tax20203 — Mon, 23 Mar 2020 06:56:18 GMT

Hi,

I have very similar situation for contribution made in 2019 and withdrawn in January 2020 and my brokerage will provide 1099-R only in 2021. Here are few questions I have :

1) For Box 7, the suggestion is to use codes P and J. Why use P (Return of contribution taxable in 2018) while code 8 (Return of contribution taxable in 2019) seems correct?

2) For the question "Which year on form 1099-R?" I have to select 2020. Is that correct? I am getting a prompt to amend 2018 return when I select 2019 instead of 2020.

3) Do I also have to file Form 4852 by selecting "Need to prepare a substitute 1099-R"?

Re: 1099-R due to over funding need to Amend Previous Taxes

JohnB5677 — Mon, 23 Mar 2020 20:26:10 GMT

This is the IRS website for substitute 1099-Rs IRS 1099-R Substitute . If you scroll down to Table 1. A code 8 is for 2020 and a code P is for 2019. Your reasoning was sound, but P is the correct thing to post.

Re: 1099-R due to over funding need to Amend Previous Taxes

Mr_Crow — Fri, 19 Feb 2021 03:13:43 GMT

My Issue is fairly similar. A 2020 1099-R with code JP. I understand from the other answers this goes on an Amended 2019 return. Where my question differs is there is a 2020 1099-DIV from the $25.27 capital gain that occurred as the excess had to be pulled out.

Does this 1099-DIV go on the Amended 2019 return as well?

Re: 1099-R due to over funding need to Amend Previous Taxes

DanaB27 — Sat, 20 Feb 2021 13:38:53 GMT

No, the 1099-Div 2020 will go on your 2020 tax return.

Yes, the 2020 1099-R with code JP goes on your 2019 tax return. Please see How do I amend a 2019 return in TurboTax?.

Re: 1099-R due to over funding need to Amend Previous Taxes

Mr_Crow — Sat, 20 Feb 2021 14:45:07 GMT

Thank you Dana,

A follow up question. How do I double check that the Amended 2019 is doing what I expect? Per my financial Advisor (Roth IRA Custodian) "What I do know is

1) you have to pay tax on the $27.65 and

2) we took it out in time so you don’t have to pay the 6% penalty on the excess cont. "

Re: 1099-R due to over funding need to Amend Previous Taxes

DanaB27 — Sat, 20 Feb 2021 15:01:35 GMT

You will look at the correct Form 1040 it should have the earnings of $28 (it will round up) on line 4b (taxable amount).

TurboTax will also create Form 5329 and it should show a $3 (rounded up) additional tax on line 4 (10% early withdrawal penalty).

Correct you will not have the 6% penalty on the excess contribution because you withdrew the excess and earnings on time.

Re: 1099-R due to over funding need to Amend Previous Taxes

Mr_Crow — Sun, 21 Feb 2021 00:55:36 GMT

Thanks again, I know this is snow balling but hopefully a final question.

In 2019 The State of IL altered my line 16 from $426 to $401 due to my confusion around buying and selling our primary home in the same tax year. In summary, while I don't fully understand what numbers they changed to arrive at this.

Question:
In Amending my and State due to the original issue with the 1099-R.
1)I assume the IL Amended needs to reflect the line 16 $401 change, Correct?
2)How should I go about making that change? I'm guessing they changed the property tax from $8,513 to $8,020

I greatly appreciate your help.

Re: 1099-R due to over funding need to Amend Previous Taxes

DanaB27 — Sun, 21 Feb 2021 13:09:25 GMT

You won't have to amend your IL state return because IL doesn't tax retirement distributions. Please see IL: Does Illinois tax my pension, social security, or retirement income?

You will only need to amend your federal return.

Re: 1099-R due to over funding need to Amend Previous Taxes

Anonymous — Sun, 11 Apr 2021 11:19:55 GMT

I have a similar issue. Received 1099-R for 2020 in 2021 for over-contribution made in 2019 Roth IRA due to over AGI maximum for any Roth IRA contributions. Box 7 has JP and box 1 has $7518.44 and $6458.87and box 2a has a taxable amount of $518.44 (over age 59 1/2 ) and $458.87 (under 59 1/2) for each of us. I was over 59 1/2 when this occurred but my husband was not (same maximum overage since we file jointly).

Do I have to amend our 2019 tax return and pay taxes on only the box 2 amounts? What form do I file for 2019? and do I remove the 1099-R from my Turbo tax 2020 tax return. Will only my husbands taxable amount be penalized 10% since he was not 59 1/2 or will both? Is there an additional 6% penalty added to the 10% for the period from April 8, 2019 (deposits made) to July 14, 2020 (Deposits removed)?

Totally confused what to file for each person on what year and form numbers, how to calculate taxes due, what lines to fill in? Some directions say file form 1040X or Form 5329 or Schedule 2 (1040SR) or 5498 or all of them???. Which forms numbers do I file for each person, what year are the forms from, what lines do I fill in, how do I calculate the taxes for each person owed and do I remove the 2020 1099-R's from my 2020 tax return. Turbo tax said I had to file a 2019 amendment for these 2020 -1099-R's. Since 2019 taxes were files by paper mail this will all have to be done manually.

Also, do I have to file an amendment for 2019 Hawaii State tax as well?