Roth IRA Contribution Withdraws

[RobertB4444]

Ok, and you have correctly claimed the "Other Reason" on the distribution and you are over 59 and a half?

@cole21771 

[cole21771]

The Other Reason/claims page there is for if you used the money for a qualified reason which is unrelated to pulling out a contribution.

And you don't have to be over 59.5 to pull out contributions you've made to a Roth IRA without penalty.

https://www.schwab.com/ira/roth-ira/withdrawal-rules#:~:text=You%20can%20withdraw%20contributions%20....

[DanaB27]

It seems you have requested a return of excess contribution plus earnings because of your code 8J in box 7. A regular distribution would have code J if it was an early distribution and then the steps mentioned above would be applicable (contributions withdrawn would be tax- and penalty-free).

Since you have a return of excess contributions plus earnings, the earnings will be taxable and subject to the 10% early withdrawal penalty (if you are over 59 1/2 you can enter the exception for the penalty). Only the earnings should be listed in box 2a taxable amount.

If you believe your financial institute gave you the wrong form because you made a regular distribution then I would advise you to contact them.

To enter the Form 1099-R with code 8J:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Enter your Form 1099-R
5. On the "Which year on Form 1099-R" screen say that this is a 2023 Form 1099-R.
6. Click "Continue" after all 1099-R are entered and answer all the questions.
7. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" if you are over 59 1/2 (if you are under 59 1/2 click "Continue")

 @cole21771

[cole21771]

They ended up returning to me $5914 which I thought was strange at the time. So that would suggest that my contribution lost money while in there and therefore shouldn't have to pay any penalty on it.

But I suppose there's nothing turbo tax can do about that and that I should probably contact Fidelity to see if they can do anything about it.

[DanaB27]

If you had a loss on the return of excess contribution then box 2a should be $0 and you should have $5,914 on line 4a and $0 on line 4b on Form 1040 (assuming you didn't have any other Form 1099-R).

To preview Form 1040:

1. Click on "Tax Tools" in the left menu
2. Click "Tools"
3. Click "View Tax Summary" in the Tool Center window
4. Click on "Preview my 1040" on the left

Yes, it might be best to contact Fidelity to correct Form 1099-R if necessary.

@cole21771