Excess Roth IRA contribution

[ljwil123]

I made a Roth IRA contribution in 2023 of $6500 and didn't realize my error until TurboTax flagged it as excess due to not having earned income. I did a return of excess (in 2024) with my brokerage, and it was determined that my withdrawal distribution would be $4352.59 as I had $2147.41in losses.  I have not yet filed my taxes for 2023 and am wondering how to input this information so I won't have to pay taxes on the difference as TT has me put $6500 in as a contribution and my brokerage says my 1099R will show a distribution of $4352.59 with a separate letter showing the losses that I won't get until next year.  Right now TT is wanting me to pay $129 of tax because I took out less than I contributed but exactly the amount the brokerage said I needed to.  I'm confused on how to do his properly, can someone help? 

[ThomasM125]

You are going to enter a substitute Form 1099-R in TurboTax to report the return of contributions. You can enter the amount you contributed of $6,500 in box 1 on that form. Since it is more than the amount the broker will report the IRS won't be concerned about it, they would only be concerned if the amount was less.  

To enter a refund of excess IRA contributions in the current year follow these steps:

1. Go to the personal income section of TurboTax 
2. Find the Retirement Plans and Social Security menu option
3. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
4. Choose Add Another 1099-R
5. Choose I'll type it in myself
6. On the screen that says Tell Us Which 1099-R You Have choose I need to prepare a Substitute 1099-R
7. Enter the distribution amount in box 1 of the substitute 1099-R
8. Enter the earnings in box 2(a)
9. Enter code "P" in box 7 *add code "J" if from ROTH IRA
10. When asked about the year on the form 1099-R, say it is for the year following the year you are working on