Confused on when to file 1099-R?

[gumibear]

Hi,

I made an excess contribution in 2023. I think I will be able to withdraw it right before the deadline in 2024, but I don’t think I will get the 1099-R until late this year.

I think I would have to amend 2023 tax return when I eventually get the 1099-R, but the turbotax help documentation suggests there’s an easier way.

It states: “There’s an easier way, though: Just enter the Form 1099-R on your 2023 return. When you do, enter code P and code J in box 7. You will be asked whether this Form 1099-R was issued with the year 2023 or 2024 printed on it.  Select 2024.”

My confusion is that since I won’t get the 1099-R until end of this year, how can I enter it with my 2023 return?  Is this a typo?  Did they mean to write 2024 return?

Thanks in advance.

[RachelW33 · Accepted solution]

No, that is not a typo, the Form 1099-R needs to be reported on your 2023 Tax Return.  You can save yourself the trouble of filing an Amendment next year when you receive the 2024 1099-R by reporting it on your return now.  To do so, you will create a "mock" 1099-R and then you can just ignore the 1099-R when you receive it next year.

To create a Form 1099-R in your 2023 tax return, please follow these steps:

1. Sign in to your TurboTax account and open your return
2. Select Federal from the menu, then Wages and Income
3. Scroll down and click on Retirement Plans and Social Security: 1099-R, IRA's, 401(k), early withdrawals
4. Click on Start/Revisit next to IRA, 401(k) Pension Plan Withdrawals (1099-R)
5. Answer Yes to Did you get a 1099-R in 2023?"
6. Select I'll type it in myself
7. Enter the 1099-R provider's info and click Continue
8. For Box 1 Gross Distribution, enter the total distribution (contribution plus earnings)
9. For Box 2a Taxable Amount, enter the earnings
10. For Box 7 check the box I have more than one value in Box 7 and enter J and P (Note: Code P will indicate in the drop-down menu that it is for "Return of contribution taxable in 2022" but you can ignore this since the follow-up questions will tell TurboTax that it is taxable in 2023)
11. Click Continue
12. If you come to the screen Is the IRA/SEP/SIMPLE box on this 1099-R checked, choose NO, the box is blank
13. On the screen Which year on Form 1099-R enter that this is a 2024 Form 1099-R
14. Click Continue after all 1099-R's are entered and walk through the interview questions
15. Continue until you get to the screen Did you use your IRA to pay for any of these expenses? and enter the amount of earnings under Corrective distributions made before the due date of the return

[gumibear]

Thank you very much for the detailed response.  It is very helpful.

I think these instructions for turbotax online might differ slightly from the version I’m using (home and business Mac download), but I can follow it for the most part.

I didn’t get asked the question in step 15, so I hope that it isn’t important.

For Box 2a Taxable Amount, which I think is the same as net income attributable, my value is negative because I lost a ton of money last year unfortunately. I just want to confirm that this is possible.

Lastly, if for any reason the 1099-R I get later from my brokerage doesn’t match what I’ve input in this year’s filing, will I have to amend this year’s tax return, even if I dont have any taxable distribution since I lost money?

Thank you!

[DanaB27 · Accepted solution]

If you had a loss then you will enter $0 in box 2a. You will only get the question in step 15 if you had earnings shown in box 2a. Therefore, this question doesn't apply to your situation.

You won't need to amend your 2023 return when you receive the 2024 Form 1099-R in 2025 since you entered it already.  Only if you had an amount in box 2a would you need to amend the return but that doesn't seem likely to happen if you requested the withdrawal of excess contribution plus earnings but had a loss.

[heyengel]

Thank you, this is helpful. However, since I won't be getting the 1099-R until next year, do I need to calculate the earnings myself in order to file the mock 1099-R this year?

[DawnC]

Yes, but when you request that the excess contributions and related earnings be distributed, the financial institution can give you the earnings amounts.  @heyengel 

To steer clear of the 6% tax, file a withdrawal request.  Contact your financial institution and request to withdraw the excess contribution, plus earnings, by the due date of the return (including extensions).   The earnings are included as taxable income for the year the excess contribution was made.