Question

Filling out 5329 form when excess contributions have been removed

Forum|Forum|3 years ago
March 18, 2023
1 reply
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Hi. I had excess roth IRA contributions for 2022. In the past month I withdrew my excess contributions (plus $70 extra to be on safe side). I had no earnings all last year. So my understanding is that since I removed my contributions and will file my taxes by the tax deadline for 2023, I avoid the 6% penalty (and have no earnings to report on my taxable income). My question is that I'm not sure TurboTax filled in the 5329 form correctly. Line 18 (part 4) talks about excess contributions from 2021 (reported on form 5329) - I didn't have any from 2021 or any other year, but TurboTax put my excess contributions for 2022 on line 18. Is this correct? This is basically causing me to have a value on line 25 where I'm having to pay a 6% tax (which I thought I was avoiding!). I'm so confused how this form should be filled out if I have ALREADY withdrawn my excess contributions for 2022. Can someone please clarify?

M

Mike9241

on the IRA contribution section you enter the actual contribution then on the page that says you have a penalty

enter the amount withdrawn (by 4/15/2023). there should no longer be a penalty but the 5329 may appear if you enter its value on 12/31/2022 (line 25 of the 5329 should be blank or zero)

A

athomAuthor

Thanks for the reply. These instructions are what I did previously and unfortunately, that doesn't seem to work for some strange reason. I tried deleting the 5329 form and going through the instructions again and I get the same result.