In 2021, I estimated that I would be able to make the full Roth contribution of 6000, however, my AGI was just slightly above the limit and I overcontributed by $40. I contacted Vanguard and was able to get the $40 (plus any earnings) returned BEFORE I filed my 2021 taxes in May 2022. Because this excess was returned, my 2021 taxes were filed showing a Roth IRA contribution of 5960, which was the maximum I could contribute for that year. Note that I filed it with a contribution of 5960 instead of a contribution of 6000 and a distribution of 40 for the excess.
The total amount returned came out to be $40.81. In January of 2023, I received a 1099-R with boxes J and P checked, showing the amount of 40.81, of which $0.61 is taxable and 0.20 was withheld for federal taxes. My question is, since I already reported a contribution of $5960 on my 2021 W-2, do I need to amend that return with the 1099-R I received in 2023?
Additionally, would I need to include the 1099-R showing 40.81 for my 2022 tax filing since it shows a small taxable amount of 0.61? Basically, I'm confused as to whether to include the 1099-R on my 2022 tax return, or to amend my 2021 tax return with the 1099-R.
Thanks!
The earnings shown in box 2a are taxable on your 2021 tax return and if you didn't enter a 2022 Form 1099-R with codes P and J on your 2021 tax return when you filed it then you will have to amend the 2021 tax return to report the earnings.
If you had taxes withheld then you will enter the 2022 Form 1099-R on your 2022 tax return to get the taxes applied to 2022. TurboTax will ignore the income because of the code P but will apply the taxes withheld.
Thank you. So it sounds like I will have to file this 2022 1099-R with my 2022 taxes (for the 20 cents of federal income tax withheld in box 4), and also amend my 2021 return to include this same 1099-R (for the 61 cents in box 2a)?