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earnings on excess IRA contrib

taxtime527
Level 2

Client contributed to IRA in 2020 but is filing MFS.  He withdrew the contrib in March 2021.  It had earnings.  The excess contribution will be reported (and not taxed) on a 1099R in 2021, but the earnings are supposed to be reported in the year the excess contribution was made, 2020.  My question is where and how do you report these earnings without a 1099R for 2020?

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JRC
Level 5

Create a 1099R entry for the Excess Earnings only. Distribution Code for Roth was 8 & J. For Early Distribution from Roth. Ask for their EIN#

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5 Replies 5
JRC
Level 5

Create a 1099R entry for the Excess Earnings only. Distribution Code for Roth was 8 & J. For Early Distribution from Roth. Ask for their EIN#

View solution in original post

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taxtime527
Level 2

Thanks JRC!

rbynaker
Level 11

Was the client relying on spousal earned income for the contribution limit?  Filing MFS does not necessarily mean (s)he cannot contribute to an IRA.

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taxtime527
Level 2

The client is not relying on spousal earned income for the contribution.  They choose to file MFS due to student loans.

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taxtime527
Level 2

They are both covered by plans through work.

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