I tried to amend my 2021 return due to excess roth but somehow after I input everything it says no change in my taxes, even though I'm pretty sure I'm supposed to pay a penalty fee on 2020 contributions. I made contributions in 2020, 2021, and 2022, and when I realized I was not qualified I withdrew the contributions in June of 2022. I went back to amend my 2021 return. Below are my steps: 1) I select I'll choose what I work on
2) I scroll to the 1099R section
3) I enter the 1099R with code JP ($0 earnings because I was losing when I withdrew) and select 2022 on the question which year for form 1099R
I also enter the 1099R with code J only (I believe this is the 2020 one)
4) After that I click next and it asks various questions like did I owe the Roth for at least 5 years which I select no. Did I have a roth open on 12/31/2021 which I select yes because I still have my roth account.
5) On the question withdraw from roth IRA before 2021, do I answer "No" here? because I withdrew the amount for all three years in 2022?
6) Enter Prior year roth IRA contributions. For this question I went back to all my contributions in roth and add the amount up until 2020. Do I also include the 2021 contribution in here or only up until 2020 contribution? Do I need to subtract out any distributions if I withdraw the money in 2022 for all three years? Currently I'm not subtracting out any.
7) Enter excess contributions question, I'm currently entering excess amount for 2020. Do I need to enter excess amount for 2021 in here also?
😎 After that it says explain return of contribution and I just type in not qualified for 2020 and 2021.
It then closed out the section. I don't see the penalty portion anywhere. I know I'm supposed to pay a 6% for 2020 contribution. Thank you.
3. Please do not enter the 2022 Form 1099-R with code J on your 2021 tax return, it belongs on your 2022 tax return. Please remove it from your 2021 return. Yes, entering 2022 Form 1099-R with code JP on your 2021 return is correct.
5. Yes, to the question "withdraw from Roth IRA before 2021" you will answer "No".
6. For net contributions, you will add all Roth contributions from prior to 2021 (including the 2020 excess contribution removed) but do not add the contribution for 2021. After 2022 you will have for net contributions the Roth contributions prior to 2021 minus the 2020 contribution (do not add or subtract excess contributions that you removed before the extended due date).
7. No, you do not enter the excess for 2021 for this question you only enter the excess from 2020.
8. For the explanation statements enter "Return of excess contribution for 2021 of $xxxx (enter excess contribution amount for 2021) with loss"
TurboTax will calculate the penalty on Form 5329 part IV because you entered the excess contribution from prior years (but you first have to delete the 2022 Form 1099-R with code J).
3. Please do not enter the 2022 Form 1099-R with code J on your 2021 tax return, it belongs on your 2022 tax return. Please remove it from your 2021 return. Yes, entering 2022 Form 1099-R with code JP on your 2021 return is correct.
5. Yes, to the question "withdraw from Roth IRA before 2021" you will answer "No".
6. For net contributions, you will add all Roth contributions from prior to 2021 (including the 2020 excess contribution removed) but do not add the contribution for 2021. After 2022 you will have for net contributions the Roth contributions prior to 2021 minus the 2020 contribution (do not add or subtract excess contributions that you removed before the extended due date).
7. No, you do not enter the excess for 2021 for this question you only enter the excess from 2020.
8. For the explanation statements enter "Return of excess contribution for 2021 of $xxxx (enter excess contribution amount for 2021) with loss"
TurboTax will calculate the penalty on Form 5329 part IV because you entered the excess contribution from prior years (but you first have to delete the 2022 Form 1099-R with code J).
Thank you. I followed your instructions and only entered the JP form when I amended 2021. After that I see that Turbo created a form 5329, with only section IV filled out. Line 18 enter your excess contributions from line 24 of your 2020 form 5329 it has $6000. Line 19 and 20 both show 0. So for total excess contribution on line 24 it has 6000 and additional tax on line 25 is 360.
Is the payment of $360 in this case the penalty for 2020 excess and not 2021 excess because I withdrew before October 2022? I’m just trying to understand because I couldn’t figure out how Turbo tax knew about 2020 excess if I didn’t enter the other form. Thanks.
Am not an expert. However, I searched Internet with "What to do if you contribute too much to your Roth IRA account." The info. provided by "Investopedia.com" seems to have some good info.