Withdraw of Excess Roth IRA Contribution

[nguyen-mike-h]

Hello,

My 2021 Roth IRA contributions were all in excess due to my income.  I haven’t filed my tax return for 2021 yet, and I asked my financial institution to withdraw my contributions from 2021 and its earnings.  

As I understand it, the earnings would be considered income for 2021 given the contributions were made in 2021. however, my financial institution told me that they would not give me a 1099R until 2023 for the withdraw my 2021 contributions.  

How would I file my 2021 taxes without the 1099R from my financial institution, which would show the earnings from the contributions and that I withdrew my excess contributions?

[MinhT1]

If you withdrew your 2021 excess contribution to your Roth IRA before the due date of the 2021 tax return (April 18, 2022), make sure that you also withdraw the related earnings.

On your 2021 tax return, you do not report the excess contribution as it has been withdrawn. The earnings have to reported as Other reportable income and taxed in 2021. These earnings are also subject to 10% early withdrawal penalty if you are younger than 59 1/2. You do not need a 2021 form 1099-R to report the earnings. Use the amount given in the letter you receive from your broker when you withdraw the excess.

When you receive the 2022 form 1099-R (in 2023) for this withdrawal, there is no further action needed and nothing is reported on your 2022 tax return..

[nguyen-mike-h]

Thank you! That clarifies everything! I appreciate you!

[liaocs2008]

Hi MinhT1,

I run into a similar situation and I have filed tax extension already in 2022. 

I opened Roth IRA and made excess contribution ($5000) in 2021. However, I didn't have any earnings but lost. So I only get 5498 form for Roth IRA where my market value is lower than my contribution. Today I just sold everything in Roth IRA and transferred money out. Since I lost money, the transferred amount is less than my contribution. My broker (Fidelity) says I can only get 1099R in 2023. 

May I ask what to do in this situation using Turbotax? Can I report the lost in Roth IRA to reduce the earnings in 1099 from other brokerage account? 

Thanks in advance!