My employer recently tried to correct a 2022 after-tax excess contribution to my 401k plan. The contribution had been rolled over to my Roth IRA at the end of 2022, so my employer was not able to correct the excess contribution. I, therefore, had the excess amount plus earnings moved from my Roth IRA to my personal account.
My question is: do I need to amend my 2022 returns? When I tried to do so in TurboTax, I manually adjusted the amounts reported on my original 2022 1099-R. The result was zero impact to my taxes, so TurboTax recommended I verify that an amendment needs to be filed. Did I handle that correct? Am I missing anything? Is there any reason to believe a return needs to be file for information purposes only?
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The amount contributed in excess of the permissible amount that was subsequently rolled over to the Roth IRA became a regular contribution in 2022 and when you had that amount removed the earnings required to accompany that amount became 2022 income that must be reported on an amended 2022 tax return (even though the distribution occurred in 2023).
I would not be in any hurry to amend the 2022 tax return. I would wait until you actually receive the code JP 2023 Form 1099-R for the corrective distribution from the Roth IRA that you'll need to enter into 2022 TurboTax. By that time you should also have received a corrected code G 2022 Form 1099-R from the plan (showing the modification that you have already made in 2022 TurboTax). You'll want to use the corrected 2022 tax file when transferring into 2023 TurboTax to begin your 2023 tax return so that the correct Roth conversion basis will be transferred in.
The amount contributed in excess of the permissible amount that was subsequently rolled over to the Roth IRA became a regular contribution in 2022 and when you had that amount removed the earnings required to accompany that amount became 2022 income that must be reported on an amended 2022 tax return (even though the distribution occurred in 2023).
I would not be in any hurry to amend the 2022 tax return. I would wait until you actually receive the code JP 2023 Form 1099-R for the corrective distribution from the Roth IRA that you'll need to enter into 2022 TurboTax. By that time you should also have received a corrected code G 2022 Form 1099-R from the plan (showing the modification that you have already made in 2022 TurboTax). You'll want to use the corrected 2022 tax file when transferring into 2023 TurboTax to begin your 2023 tax return so that the correct Roth conversion basis will be transferred in.
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