- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Did you use the links already provided in this topic? Click the resources offered that should help you with your questions.
https://www.irs.gov/forms-pubs/about-form-5329
If you remove Excess contributions made for a specific tax year, by the due date of the tax return for that specific tax year, you can treat the contribution as if that didn't happen. Any earnings on that specific amount will also need to be removed, to avoid paying the additional 6% excise tax on these earnings. And the removal of these earnings then falls under the penalty (if the taxpayer is not at least 59 1/2, if this is a Roth account and there has not been a Roth account for 5-years, etc) and it is subject to income taxes (as it is income not yet taxed). The earnings are reportable for the Tax year of the Excess Contribution, since they are earned on that amount.
You don't get a 1099-R until it comes out for the year the Removal got made. It doesn't matter if you put in 2021 contributions in 2021, or by the filing of the tax form in 2022, as long as you also removed Excess of tax year 2021 by the filing date for the 2021 tax return. That means the 1099-R will come out in 2022 marked as applicable to the prior tax year, if you don't remove it before the end of 2021.
Excess contributions have nothing to do with Rollovers. Rollovers are not New money. They are the movement of money. Contributions are New money.
"Level Up" is a gaming function, not a real life function.
