ROTH IRA Excess Contributions

Forum|Forum|1 year ago
March 5, 2025
2 replies
37 views

I opened a ROTH IRA account and made a contribution to it in 2024, but after calculating my total income for 2024, I realized I no longer qualify for the account. I submitted a "Return of Excess" form to my brokerage in Feb 2025 to close the account and return any contributions + earnings (and this has been completed).

However, I was notified that I would not receive a form 1099-R from my brokerage until January of next year (Jan 2026) and mentioned that I should consider filing a Form 5329.

I am wondering how do I file a Form 5329 in turbo tax and handle this situation properly?

Ask the Experts - MetLife VII - Mar 2025

KrisD15

Level 15

Since you made the correction before filing your tax return, you can make an entry to claim only the earnings as income on your original 2024 Tax Year return OR wait until you get the Tax Year 2025 1099-R (next year in 2026) and amend for 2024.

HERE is a link for claiming the correction now and only pay tax on the earnings. If you follow these instructions, you will not need to report the 1099-R you get for this correction in 2026.

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ThomasM125

Level 15

You can report the return of excess IRA contribution on your 2024 tax return so you don't have to amend it when you receive the 1099-R form in 2025.

To enter a refund of excess IRA contributions received in 2025 for 2024 contributions on your 2024 return, follow these steps:

Go to the personal income section of TurboTax
Find the Retirement Plans and Social Security menu option in the Wages and Income section of TurboTax
Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
Choose Add Another 1099-R
Choose I'll type it in myself
On the screen that says Tell Us Which 1099-R You Have choose I need to prepare a Substitute 1099-R
Enter the distribution amount in box 1 of the substitute 1099-R
Enter the earnings in box 2(a)
Enter code "P" in box 7