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posted Apr 6, 2025 4:00:25 PM

1099-R Roth IRA Inadvertent Contribution & immediate withdrawal - NOT an excess contribution - can I reverse it?

Thanks in advance for any advice. In 2024 I accidentally transferred $4K to my Roth IRA instead of my savings account. I immediately called the agency and had them move the $4K back to my bank account from my Roth IRA account. This all happened in a single day. 

 

Fast forward to receipt of a 1099-R from the bank with the gross distribution (box 1) reported as 4,000. Box 2B is marked "Taxable amount not determined" and Box 7 Distribution Code is marked "J".

 

This was NOT an excess contribution. 

Once I entered the 1099-R into Turbo Tax (my return was all but complete and I found this 1099-R in my email before filing and went back to add it), it reduced my refund by $752. I assume this $4K was treated as "income".

 

Is there anyway around this accidental contribution followed immediately by the withdrawal of the contribution? I am not yet 59.5.

 

Should I contact the bank to see if there could be some sort of exception applied to the 1099-R or is there something I should do manually in TurboTax to NOT have this counted as taxable income?

 

Thank you.

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1 Replies
Expert Alumni
Apr 7, 2025 6:34:54 AM

You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. 

 

You will have to enter a Roth IRA contribution under Deductions & Credits:

 

  1. Click on "Search" on the top right and type “IRA contributions” 
  2. Click on “Jump to IRA contributions"
  3. Select “Roth IRA”
  4. Answer ‘Yes” on the “Roth IRA Contribution” screen
  5. Answer “No” to “Is This a Repayment of a Retirement Distribution
  6. Enter the Roth contribution amount 

 

Also, make sure you enter your net contributions prior to 2024:

 

  1. Click on "Search" on the top and type “1099-R” 
  2. Click on “Jump to 1099-R” and enter all your 1099-Rs
  3. Click "Continue" on the "Review your 1099-R info" screen after you entered all you Form 1099-R
  4. Answer "Owned Any Roth IRA for Five Years?" screen
  5. Continue through the questions and make sure you enter the net contributions prior to 2024 on the "Enter Prior Year Roth IRA Contributions" screen
  6. On the "Any Roth IRA Conversions?" screen answer "Yes" if you made conversions before 2024.
  7. Continue through the questions.