Made excess contribution to IRA in 2023 that I removed in 2024 without amending.

[vermonter16]

I removed the excess contribution of $500 in February 2024 which they sent back to me via check.  They then sent me $18 and change as an early withdrawal and took out 10% taxes as an early withdrawal.  How do I report this on my 2023 tax form without having to wait to amend until next year without the 1099R in my hands or does it count on my 2024 taxes?

[fanfare]

Is this a Traditional IRA or a Roth IRA?

That's significant.

@vermonter16 

[vermonter16]

It is a traditional IRA.

[vermonter16]

One other thing is that I am 49.  I am not sure what boxes will be checked on the form when I get it next year.  I also don't want to go through amending my return.

[DaveF1006]

I would suggest reporting the withdrawal of the excess contribution on your 2023 return in the following manner.

1. Open (continue) return if you don't already have it open.
2. Inside TurboTax, search for 1099-R and select the Jump to link in the search results.
3. Answer Yes on the Your 1099-R screen,
4. Click on the box that you are creating a substitute 1099-R
5. Then select Continue.
6. In order to create a substitute 1099-R, you will need to obtain and name, address, and payer TIN as required so you can record the information properly on the form. You may need to contact Fidelity for this information or perhaps you can get information from their website.. 

The codes you will need for box 7 are J and P. Since this is a Roth IRA the only amount that is taxable are any earnings on the excess contribution. 

You will receive a 1099-R for the withdrawal in 2024 you do not need to report the information since you have reported it on your 2023 tax return.

[vermonter16]

It is for a traditional IRA, not a Roth.

[DanaB27]

If you withdrew a 2023 excess traditional IRA contribution plus earnings in 2024 before the due date, then you will get a 2024 Form 1099-R in 2025 with codes P and 1. This Form 1099-R will have to be included on your 2023 tax return and you have two options:  

• You can wait until you receive the 2024 Form 1099-R in 2025 and amend your 2023 return or
• You can report it now in your 2023 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 2024 Form 1099-R into the 2024 tax return since the withholding is reported in the year that the tax was withheld. The 2024 code P will not do anything to the 2024 tax return income but the withholding will be applied to 2024.

To create a Form 1099-R in your 2023 return please follow the steps below:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2023?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2 enter the earnings
8. Box 7 enter P and 1 
9. Check the "IRA/ SEP/ SIMPLE" box
10. Click "Continue"
11. On the "Which year on Form 1099-R" screen say that this is a 2024 1099-R.
12. Click "Continue" after all 1099-R are entered and answer all the questions.
13. 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 2022" you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2023.

@vermonter16 

[vermonter16]

• @DanaB27 Got it.  One other question.  Do I report the taxes or leave that blank?  I know what they are but not sure if I report them on this year's taxes or next year's.  I'm confused since it is a 2024 form that I will be reporting for 2023....the taxes were paid in 2024

[vermonter16]

@DanaB27 @DaveF1006 So I completed the form without the tax....when I enter the tax it applies it to 2023...of course that makes sense.  But it was taken out in 2024.  What do I do with the tax?  Leave it empty?  Then what do I do for next year when that form comes?  Just report the $18 and taxes like it was a 2024 form?

[DanaB27 · Accepted solution]

Yes, you do not enter the tax withheld when you enter the Form 1099-R on your 2023 return. The taxes withheld in 2024 will have to be applied to 2024 when you enter the 2024 Form 1099-R with codes P and 1 on your 2024 return. TurboTax will ignore the income for 2024 because of the code P.