Removal of excess ROTH IRA contributions

[RWH2024]

For tax year 2024, I made an $8,000 contribution to my ROTH IRA (I am over 50 years old).  Turbo Tax told me I made too much income to make a contribution and that I should withdraw the contribution, which I did the next day.  How do I show the removal of excess contributions on my tax return?

[MarionH]

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If you made an excess Roth IRA contribution in 2024 and withdrew the contribution plus earnings in 2025 before the tax deadline, you will receive a 2025 Form 1099-R (with codes P and J) in 2026. You must report this on your 2024 tax return. You have two options:

1. Wait to amend your 2024 return after receiving the 2025 Form 1099-R in 2026.
2. Report it now on your 2024 return and ignore the 2025 Form 1099-R unless it includes Box 4 Federal withholding and/or Box 14 State withholding. If withholding is reported, you must include the 2025 Form 1099-R on your 2025 tax return because withholding is credited in the year it was applied. Code P will not impact 2025 income but will account for the withholding.

Steps to Manually Enter Form 1099-R in Your 2024 Return in TurboTax:

1. Log in to your TurboTax account.
2. Click Search in the top right and type "1099-R."
3. Select Jump to 1099-R.
4. Answer Yes to "Did you get a 1099-R in 2024?"
5. Choose I'll type it in myself.
6. Enter the following:
   • Box 1: Total distribution (excess contribution + earnings).
   • Box 2a: Earnings only.
   • Box 7: Enter codes J and P.
7. Answer No to "Is the IRA/SEP/SIMPLE box checked?"
8. On the "Which year on Form 1099-R?" screen, select 2025 Form 1099-R.
9. Continue answering all prompts until reaching "Did you use your IRA to pay for any of these expenses?"
10. Enter the earnings amount under Corrective distributions made before the due date of the return.

Complete the rest of your return, ensuring all 1099-R information is accurate.

Since the funds were withdrawn before the due date, there will not be a penalty on excess contributions.