I made excess contributions to my Roth IRA in 2021 due to my income exceeding the maximum limit for contributions.By the time I figured this out I had already made three 2022 contributions as well. My contributions have always been set up to be withdrawn from my checking account automatically. I withdrew both my 2021 and 2022 contributions (and gains) prior to the deadline for filing my 2021 tax return. I entered the 2021 withdrawal into my 2021 return (created a 1099-R). Based on guidance I found on TurboTax help last year this was permissible instead of waiting for the actual 1099-R.This year I received the actual 2022 1099-R. The Gross Distribution is a total of the 2021 and 2022 contributions.My question is....how do I enter this into Turbo Tax? If I enter the 1099-R into my 2022 tax return as is, I will be reporting my withdrawn 2021 contributions for a second time. Thank you.

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ptt87

Level 2

Question

Excess Roth IRA Contributions

Forum|Forum|3 years ago
March 7, 2023
1 reply
0 views

I made excess contributions to my Roth IRA in 2021 due to my income exceeding the maximum limit for contributions.
By the time I figured this out I had already made three 2022 contributions as well. My contributions have always been set up to be withdrawn from my checking account automatically.
I withdrew both my 2021 and 2022 contributions (and gains) prior to the deadline for filing my 2021 tax return.
I entered the 2021 withdrawal into my 2021 return (created a 1099-R). Based on guidance I found on TurboTax help last year this was permissible instead of waiting for the actual 1099-R.
This year I received the actual 2022 1099-R. The Gross Distribution is a total of the 2021 and 2022 contributions.

My question is....how do I enter this into Turbo Tax? If I enter the 1099-R into my 2022 tax return as is, I will be reporting my withdrawn 2021 contributions for a second time.

Thank you.

MaryK4

Level 15

Because you withdrew before the tax filing deadline, you do not have to pay tax on the contributions, just any income earned while the excess was in the account. You have to report the income in the year it is earned which is why TurboTax always let you know if you overcontributed, otherwise you have to pay the penalty for the prior year. The gross distribution is reported , but the taxable amount should only be the interest.

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ptt87Author

Level 2

Thank you for the quick reply.

So do I enter the 1099-R into Turbo Tax as is, which reflects both year's withdrawals?

MaryK4

Level 15

Yes, you can enter the 1099-R as it is- just remember NOT to enter them as Roth Contributions this year (or you may get the same warning- the most important thing is that the income (interest) gets reported in 2022.

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