Withdraw Excess Roth Contributions at a Loss

[photoartman]

Thank you.

[loeyjc]

Hi,

I have the same issue - an excess Roth contribution at a loss.

Summary:

$2,719 - 2022 Excess Roth Contributions

$335 - Loss as of 3/31/2023

$2,383 - Amount withdrawn on 4/4/2023. Taxes filed on 4/5/2023.

2023 1099-R says $2,383 in Box 1, zero in Box 2a, codes J,P in Box 7.

I am following the steps provided and am stuck on your step 4. I don't reach a "penalty screen". The only place I can enter an amount says "Enter Excess Roth Contributions for Prior Years". I entered $2,719 here. There is no place to enter the $2,719 as withdrawn. Can you please further assist?

[DanaB27]

You do not enter anything on the "Enter Excess Roth Contributions for Prior Years" screen on your 2023 return because you removed the 2022 excess before the due date. Therefore, you no longer have an excess contribution.

The instructions above with the penalty screen are for the year you make the excess contribution for. In your case, you should have entered it on your 2022 tax return during the IRA contribution interview. Then TurboTax won’t calculate the 6% penalty on your 2022 tax return.

@loeyjc