What amount do I enter in "Contributions Withdrawn Before the Due Date

[nachob]

I found out I was $547 over my allowable Roth IRA contribution due for 2022 tax year to Adjusted Gross Income.   TurboTax said that in order to avoid penalty, I could withdraw a contribution and any gains from that amount for last year.  I contacted my financial institution and asked them to remove one of my monthly contributions.  I was contributing $583.33 each month.  I just received a statement not a 1099-R, just a statement that they withdrew a contribution for 2022 tax year that totals $628.15 with gains on the that amount.  

Now TurboTax has a window that asks me to enter "Contributions Withdrawn Before the Due Date".   Since I have not filed for 2022, this is me but what amount do I enter here?   

Do I enter the contribution amount of $583.33 that I withdrew or the whole amount with gains that I withdrew..i.e. $628.15?

Finally, the document says I will receive a 1099R next year?  I thought I would receive one for the 2022 year so I could file that at the same time even though the actual withdrawl happened in 2023.   

Can anyone help answer these?   Can't find info on what value to put in the contribution withdrawn field.

[MaryK4]

The company provided you the statement so that you can include the information on the 2022 return and not have to go back and amend next year- they will send you a 2023 1099-R because the withdrawal happened in 2023, but it will be coded in Box 7 with "prior year information".  You will want to enter the Contribution withdrawn before the due date - if you do not TurboTax will trigger the excess contribution penalty- and you will enter the $583.33 amount you withdrew.

You will get a 1099-R 2023 in 2024 with codes P and J for the withdrawal of excess contribution and earnings. This 1099-R will have to be included on your 2022 tax return and you have two options: 

• You can wait until you receive the 1099-R  2023 in 2024 and amend your 2022 return or
• You can report it now in your 2022 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or Box 14 State withholding. Then you must enter the 2023 1099-R into the 2023 tax return since the withholding is reported in the year that the tax was withheld. The 2023 code P will not do anything in 2023 tax return but the withholding will be applied to 2023.

To create a 1099-R in your 2022 return please follow the steps below:

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. Answer "Yes" to "Did you get a 1099-R in 2022?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2a enter the earnings 
8. Box 7 enter J and P
9. Click "Continue"
10. On the "Which year on Form 1099-R" screen say that this is a 2023 1099-R.
11. Click "continue" after all 1099-R are entered and answer all the questions.
12. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount under "Another reason" if you are over 59 1/2  (if you under 59 1/2 click "Continue")

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2021" you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2022.

Do not enter the taxes withheld in box 4 and 14 when creating the 1099-R for 2022. The taxes withheld belong on your 2023 return and you will have to enter the 1099-R on your 2023 return as well. The 2023 code P will not do anything in 2023 tax return but the withholding will be applied to 2023.

[nachob]

Thank you!