I made an excess contribution of $5000 to my Roth 403b in 2022. I received back these funds this year (2023), with a loss of $1000.
How do I report these on my 2022 taxes, given that I will not receive an official 1099-R until next year (2023)? Will any of these funds be taxable (box 2a of 1099-R) given that they were Roth contributions?
Thanks in advance for any help!
Because your employer does not exclude Roth 403(b) contributions from box 1 of your W-2, nothing about this excess contribution and its return goes on your 2022 tax return. Because the corrective distribution was made in 2023, IRS Pub 525 indicates that the $1,000 loss can be claimed on your 2023 tax return on Schedule 1 (Form 1040) line 8z as "Loss on Excess Deferral Distribution." The 2023 Form 1099-R should have $0 in box 2a.
Why do you think you made an excess deferral to a 403b? 403b plans are workplace retirement plans for non-profits and are usually managed by your HR department. How much did you contribute?
Be aware that a Roth IRA is not a 403b, an IRA is a private account and the rules are totally different. The contribution limit to an IRA was $6000 for 2022 or $7000 if you are over age 50, but the contribution limit for a 403b plan was $19,500 plus $6500 if you are over age 50. If you told Turbotax you contributed to an IRA when you really contributed to a 403b plan, you will get bad advice.
Please clarify what you really did and exactly when you did it.
I had 2 separate not-for-profit jobs in 2022, and both offered a Roth version of their 403b's (using after-tax funds). I accidentally contributed to both in 2022, leading to me exceeding the $20,500 limit in total for both. I realized what I did at the end of 2022, and Fidelity returned the excess funds to me this year (2023). I'm having trouble figuring out how to report this, especially because I took a loss.
Because your employer does not exclude Roth 403(b) contributions from box 1 of your W-2, nothing about this excess contribution and its return goes on your 2022 tax return. Because the corrective distribution was made in 2023, IRS Pub 525 indicates that the $1,000 loss can be claimed on your 2023 tax return on Schedule 1 (Form 1040) line 8z as "Loss on Excess Deferral Distribution." The 2023 Form 1099-R should have $0 in box 2a.