A client contacted me to explain that one W-2 was reported, $600 short of actual amount received. Prepared a Form 1040X (federal) with the hopes of submitting the corrected return prior to 5/17/21. The Amended return displayed an additional adjustment. The taxpayer had made the maximum allowable IRA deduction (less than max), but due to the W-2 change, adding in $600 additional wages, the maximum IRA deduction was reduced by $210. The contribution had already been made, so now there was an excess payment.

Unfortunately, the taxpayer is away on business until May 23rd, so unable to get his signature to mail in by today (5/17). His CFP was willing to get his signature and move the $210 to be a 2021 IRA contribution but whereas the Amendment cannot be filed by the tax deadline, it appears that the overpayment will be reported on a Form 1099-R for excess contribution. 

The problem is that the excess would be taxable next year. However, the adjustment and tax on the excess is already considered when filing the Amendment. The client would get charged for the tax a second time in 2021 tax year, with the Form 1099-R.

Any suggestions would be gratefully received, as always.

Bob