Amending tax return for excess Roth IRA 2019

[wqzqr2000]

Hi,

    I made excess contribution into Roth IRA in 2019, and withdrew all pertaining contributions and capital gains in 2020 after I fount it out, I paid 6% penalty in 2019 tax return, however, I didn't pay regular income tax and extra 10% early withdraw tax for the capital gain because my broker said they can only send 1099R form for 2020 in 2021, now I got the form 1099R of 2020, how can I make amended tax return for 2019? In 2019 turbo tax software (premier), I couldn't enter 1099R form information since current form title is 2020, so which part of income section (amended 2019 tax return) I should use to enter capital gain in my current form 1099R 2020? will it calculate extra 10% income tax automatically?

Thanks,

[DanaB27 · Accepted solution]

Please follow these steps to enter your 1099-R on your 2019 amended return:

1. Click on the "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R” and enter your 1099-R information
3. Click "Continue"
4. On the "Which year on Form 1099-R" screen say that this is a 2020 1099-R.

TurboTax will know that the form 1099-R belongs on the 2019 return because of the code P and selecting 2020 on the "Which year on Form 1099-R" screen. 

Yes, TurboTax will automatically calculate the 10% penalty.

[wqzqr2000]

Thank you very much for your quick reply.

Turbo Tax 2019 didn't ask me the  year of 1099R, and the code P inside of 2019 turbo tax is "Return of contribution taxable in 2018",therefore, I selected code 8-"Return of contribution taxable in 2019", is that ok? And should I mail the form 1099R 2019 to IRS with the amended tax return? I didn't find it in final report (only found form 5329).

Thanks again.

[DanaB27 · Accepted solution]

You will select code P and after entering all 1099-R click continue, then continue until the "Which year on Form 1099-R" screen comes up and say that this is a 2020 1099-R.

Yes, you will include the 1099-R with your amended return when you mail it to the IRS.

[wqzqr2000]

Thank you very much for your professional explanation,  it worked just like what you said.

[wqzqr2000]

Hi,

    I have one more question, I did pay estimate tax in 2019 tax return, can I use that to cover income tax and extra 10% income tax for withdrawing excess contribution and earnings from Roth IRA 2019? If so, will the estimate tax I have paid be calculated in both tax return 2020 and amend tax return 2019?

Thanks.

[wqzqr2000]

Hi,

    I double checked final reports of both amended tax return 2019 and tax return 2020 which generated by turbo tax, looks both of them calculated 6% penalty for excess contribution of Roth IRA 2019, however, I already paid 6% penalty last year in original tax return 2019, does that mean I have to pay the penalty 3 times? Which section I need to correct? 

Thanks,

[ThomasM125 · Accepted solution]

Your estimated tax will be credited to the tax year for which you made it. So, if you paid it in 2019 and designated it as applying to 2019, then you can only apply it to that year's tax return.

You should only pay the 6% excise tax for 2019, if you withdrew the excess in 2020. You need to work through the IRA contribution section on your 2020 tax return where you will see the option to indicate that you paid back your excess contribution from 2019.

[wqzqr2000]

The issue solved as per your advice, thank you very much! Have good weekend!