2022 Roth IRA excess contribution

[kelelec]

I am 65 and made an excess contribution to a Roth IRA in Dec2022.
I notified the custodian of the error in Feb2023.
They withdrew the $1500 excess contribution and calculated earnings
of $110.30 for a total of $1610.30, and informed me I would receive
a 1099R in Jan of 2024.To take care of the issue in 2022 I followed
these steps:

I created a 2022 1099R with the financial institution information.
Box 1-$1610.30
Box 2a-$110.30
Box 7- 8 (return of contribution taxable in 2022)
no witholding fed or state
no IRA/SEP/SIMPLE box checked

I thought that would tranfers those values to Form 1040
Line 4a-$1610.30
Line 4b-$110.30

It did not. I thought I may have to enter the contribution first
under Retirement and Investments.I have never entered Roth IRA data
before in TurboTax. I did that and still no help getting to transfer
to Form 1040.

I been chasing my tail ever since, can you help?

[DanaB27 · Accepted solution]

If you use code 8 only this is for excess deferrals and it will be added to your wages on line 1h of Form 1040. You will need to use codes J and P and then select in the follow-up question that it is a 2023 Form 1099-R.

Please review this information:

You will get a 2023 Form 1099-R  in 2024 with codes P and J for the withdrawal of excess contributions and earnings. This 1099-R will have to be included on your 2022 tax return and you have two options:  

• You can wait until you receive the 2023 Form 1099-R in 2024 and amend your 2022 return or
• You can report it now in your 2022 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 2023 Form 1099-R into the 2023 tax return since the withholdings are reported in the year that the tax was withheld. The 2023 code P will not do anything to the 2023 tax return but the withholdings will be applied to 2023.

To create a Form 1099-R in your 2022 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 2022?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2a enter the earnings
8. Box 7 enter J and P
9. Click "Continue"
10. On the "Which year on Form 1099-R" screen say that this is a 2023 Form 1099-R.
11. Click "Continue" after all 1099-R are entered and answer all the questions.
12. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" since you are over 59 1/2  (if you are under 59 1/2 click and removed the excess after December 29, 2022, then enter it next to "Corrective Distributions made on or after December 31, 2022")

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2021" you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2022.

[kelelec]

It worked, thanks for your help. I would have never arrived at that solution.