Love2Cruise
Level 4

Thank you for your response. I'd read the Investopedia article, but it didn't provide instructions for reporting. 

I finally found how to report the withdrawal on TurboTax. And it works perfectly! You can skip the lines that specifically pertain to TurboTax. But the basic steps are the same in ProSeries. See instructions below. The link provides the entire conversation as well as more detailed instructions for different situations.

REPORTING EXCESS ROTH IRA CONTRIBUTION

You will report the withdrawal of the excess contribution for 2022 plus earnings on your 2022 tax return.

You will get a 2023 Form 1099-R  in 2024 with codes P and J for the withdrawal of excess contributions and earnings. This 1099-R will have to be included on your 2022 tax return and you have two options:  

  • You can wait until you receive the 2023 Form 1099-R in 2024 and amend your 2022 return or
  • You can report it now in your 2022 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or Box 14 State withholding. Then you must enter the 2023 Form 1099-R into the 2023 tax return since the withholdings are reported in the year that the tax was withheld. The 2023 code P will not do anything to the 2023 tax return but the withholdings will be applied to 2023.

 To create a Form 1099-R in your 2022 return please follow the steps below:

  1. Login to your TurboTax Account 
  2. Click on the "Search" on the top right and type “1099-R” 
  3. Click on “Jump to 1099-R”
  4. Answer "Yes" to "Did you get a 1099-R in 2022?"
  5. Select "I'll type it in myself" (Will need to create one in ProSeries using the financial institution information that should be provided by taxpayer once the withdrawal has been completed)
  6. Box 1 enter total distribution (contribution plus earning)
  7. Box 2a enter the earnings
  8. Box 7 enter J and P    
  9. Click "Continue"
  10. On the "Which year on Form 1099-R" screen say that this is a 2023 Form 1099-R.
  11. Click "Continue" after all 1099-R are entered and answer all the questions.
  12. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" if you are over 59 1/2 (if you are under 59 1/2 click "Continue")

 Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2021" you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2022.

Code 8 (return off taxable contribution in 2022)

Code J (return off taxable contribution in 2021)

https://ttlc.intuit.com/community/taxes/discussion/reporting-excess-roth-ira-contribution/00/1900728

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