This question is in two-parts:
Part 1:
My wife and I (both age 57) each had Roth IRA contributions in 2023 that we later found out to be in excess because we exceeded the income threshold for married filing jointly. We found this out before we filed our ’23 taxes and reversed out the contributions from our IRA accounts. We then removed the overage amounts from our ’23 returns through the TT software before filing. Now in February of this year (’25) we received from the custodian of our IRAs, 1099-R forms for the both of us with a distribution code of PJ. The notation on the back of the form says excess contributions plus earnings taxable in 2023. I have read through several posts that are very similar but I am confused about two things. First, do I have to file an amended 2023 return with this new information? If yes, what am I supposed to add to my amended return to correct it and do I use my current version of TT to file this? Secondly, am I supposed to report this anywhere on my 2024 tax returns?
Part 2:
Once again, my wife and I had Roth IRA contributions in 2024 (they were being automatically invested from the dividends of another asset which we’ve since stopped) that were in excess because we continue to exceed the income threshold. We’ve reversed out the ’24 contributions from our IRA accounts. This month (Feb ’25) we received from the custodian of the IRA, 1099-R forms for the both of us with a distribution code of 8J. The notation on the back says excess contributions plus earnings taxable in 2024. How do I address this when doing this year’s taxes? What do I do with the information on Form 5498 (IRA contribution information) that came from the custodian? If I do have to report an unqualified distribution, will TT calculate a penalty amount for us and do we have to pay it?
