Excess IRA Contribution in calendar year 2019 question

[jtdfp]

Hi all-

I had a question regarding excess contribution to Roth IRA, - I was hoping for some last minute guidance. Here are the basics:

Made $1,800 in excess contributions during the 2019 calendar year

Realized made excess contributions last week BEFORE filing my taxes

Excess contributions withdrawn and earnings on excess contributions withdrawn (will be receiving checks for both)

Earnings on excess contributions in 2019 were $45.43

Do I have to report anything on my 2020 taxes that I am about to file (tomorrow!)?

What form/information do I need to report on my taxes before I file them (tomorrow) to avoid having to do an amendment? Is it a 2019 1099-R that will be sent to me that contains the information? (If so, going to try and get this information from the financial institute tomorrow - not sure if do-able).

(Also, do I need to report the excess contribution separately anywhere or since it is withdrawn before the filing I treat it as though it did not happen)

Further, I realized excess contributions were made so far this year in 2020, I have already halted further contributions and requested those be withdrawn and sent to me along with earnings on the excess contributions. When I file in 2021 (for 2020 tax stuff) will I report this the same way - using a 1099-R form for the earnings on excess contributions?

Most importantly, thank you!

[macuser_22]

You should receive a 2020 1099-R with a code JP in box 7 next year that will require amending 2019 to report it.

*IF* you requested a return of contributions due to an excess contribution and the excess was removed before the extended due date of the 2019 tax return and the earnings were also returned and you know that the IRA custodian will report this as a return of contribution and not as a normal Roth distribution but as a return of contribution with a code "JP" in box 7 - then:

You can just report it now and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or box 12 State withholding. Then you must also enter the 2020 1099-R into the 2020 tax return since the withholding is reported in the year that the tax was withheld. The 2020 code JP will not do anything in 2020 but the withholding will be applied to 2020.

You would enter the 1099-R with the total distribution in box 1 (the contribution plus the earnings),

The earnings in box 2a,

Enter code "P" in box 7 (Top) - don t worry that it will say "taxable in 2018 "

Enter code "J" in box 7 (Bottom).

On the "Which year" screen say that this is a 2020 1099-R. - That makes it taxable in 2019 and not 2018

After the 1099-R summary screen press continue.

If you are over 59 1/2 then on the "Lets see if we can lower your tax bill" enter the box 2a amount in the "Another Reason" box to eliminate the 10% early withdrawal penalty on the earnings.

Enter the explanation for the excess contribution and that you are reporting a 2020 1099-R on your 2019 tax return to avoid having to amend in 2020.

The box 2a earnings will be taxable income reported on line 4b on the 1040 form and if under age 59 1/2 will also be subject to a 10% penalty on a 5329 form that will be reported on line 59 on the 1040 Schedule 4 form.

[ILtaxpayer]

I'm in a similar situation but can't figure out how to fix in TT.  Made excess non-deductible IRA contribution in 2019, withdrew in Feb 2020 plus $300 in earnings BEFORE I filed my 2020 return in April.  Now I have a 2020 1099-R that shows the $300 as taxable (Box 7 Code P) and TT is telling me I need to amend 2019.  But I can't figure out how to do that since it won't let me enter a 2020 1099-R into the 2019 Turbotax Software.  Can I just let the IRS send me a bill?  I'm 60+ so there is no early withdrawal penalty issue.

[macuser_22]

You need to use the 2019 software installed on a Mac or Windows computer to amend 2019.  The return of excess is not taxable but the earnings are taxable as ordinary income on your 2019 tax return.

You certainly can enter a 2020 code P 1099-R into the 2019 1099-R interview.    TurboTax will recognize the code P and ask if the 1099-R is dated for 2019 or 2020.  Choose 2020 and answer the remaining questions. 

The 1099-R box 2a will be the taxable amount.

[ILtaxpayer]

THANKS -- I'll give that a shot