1099-R

[epiciocc12]

I had to back out contributions to a Roth made in 2024 because we ended up exceeding the limit for contributions (Surprised).

It turned out to be a loss.

I know you cannot claim losses in retirement accounts.

My question is, Is the 1099-R I won't receive until January basically irrelevant since I had a loss?

Thanks,

[PII removed]

[DanaB27]

Only the earnings are taxable in the year you made the excess contribution.  If you made an excess contribution in 2024 and withdrew the 2024 excess Roth IRA contribution plus earnings (or minus loss) in 2025 before the due date, then you will get a 2025 Form 1099-R in 2026 with codes P and J.

You can add this 2025 Form 1099-R now an TurboTax with add an explanation statement to your 2024 return.

To enter a 2025 Form 1099-R in your 2024 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 2024?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution minus loss)
7. Box 2a enter $0
8. Box 7 enter J and P
9. Click "Continue"
10. On "Is the IRA/SEP/SIMPLE box on this 1099-R checked?" screen answer "No, the box is blank"?
11. On the "Which year on Form 1099-R" screen say that this is a 2025 Form 1099-R.

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2023" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2024.

Also make sure you indicate in the IRA contribution interview that you withdrew the excess contribution by the due date:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. Enter the Roth IRA contribution
5. Continue until the penalty screen and enter the excess contribution amount withdrawn.