IRA Distribution

Forum|Forum|5 years ago
February 20, 2021
1 reply
5 views

I contributed $5500 to a Roth IRA in 2019 (for 2019). In 2020 when doing taxes for 2019, our tax professional told us we had too high of a gross income in 2019, so we couldn't contribute to a Roth IRA. I filed a removal of excess form with the investment company and had the money taken out. I now have received a 1099-R form from that company. On my tax filing it shows that I did not contribute to my Roth IRA in 2019. Do I need to amend my 2019 tax form?

Thank you

Not A Product Question

DanaB27

Level 15

Yes, because the earnings (in box 2a) on the excess contribution are taxable in 2019. You will have to amend your 2019 tax return and include the 1099-R on your 2019 return.

"To avoid the 6% tax on excess contributions, you must withdraw:

the excess contributions from your IRA by the due date of your individual income tax return (including extensions); and
any income earned on the excess contribution."(IRS)

"You must include in your gross income the interest or other income that was earned on the excess contribution. Report it on your return for the year in which the excess contribution was made." (IRS)

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NCSaxon7Author

Level 2

Thank you for the response. I'm still a bit confused.

I withdrew the excess amount before we filed the 2019 return, so shouldn't I have avoided this? Box 1 on the 1099-R shows Gross distribution as $4660.15, but 2a (taxable amount) shows $0.00.