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Level 3
posted Apr 2, 2025 8:28:51 PM

Excess contribution of Roth in 2023

I am 68 year old. I had excess contribution of Roth in 2023 (excess amount of $6300). I withdrawn the excess contribution plus the earnings of $1705 in 2024 before the due day. I got the 2024 1099-R form in 2025 with code P and J. Now I am trying to submit amend 2023 tax return for it. TurboTax told me I need to pay $519 for Federal and $98 for VA state and no extra tax. My question is that for $1705 earnings why I need to pay so much taxes? I should not get the 6% penalty right?  My tax bracket is 24% in year of 2023.

 

Thank you!

0 2 2016
2 Replies
Expert Alumni
Apr 3, 2025 5:02:37 AM

Please make sure you entered the earnings form box 2a on the "Did you use your IRA to pay for any of these expenses?" screen under "Corrective distributions made before the due date of the return".

 

  1. Click on the "Search" on the top right and type “1099-R” 
  2. Click on “Jump to 1099-R”
  3. Enter Form 1099-R
  4. On the "Which year on Form 1099-R" screen say that this is a 2024 Form 1099-R.
  5. Click "Continue" after all 1099-R are entered and answer all the questions.
  6. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

 

No, you do not pay the 6% penalty since you remove the excess plus earnings before the due date. To confirm you indicated in the IRA contribution interview that you removed the excess contribution on the penalty screen. 

Level 3
Apr 3, 2025 5:20:44 PM

Thank you  DanaB27. Yes, I completed all the steps. I just thought the tax amount is a little bigger. $519 over $1705 is about 30% but my tax bracket is 24%. Thanks.