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Amending Return for 2023 Excess Roth IRA Contribution Withdrawn in January 2024

Forum|Forum|1 year ago
March 13, 2025
1 reply
0 views

I am working on amending my 2023 tax return for excess Roth IRA contributions withdrawn in January 2024. I am including the additional income earned from the withdrawn contributions of $221.01 and having to pay tax on that income, but I don't understand why in my amended return in 2023 Turbo Tax, it's calculating an additional 10% tax in Form 5329 (Part I Line 4). Is that correct? Is it because I am correcting my tax return after all the deadlines? I corrected the excess contribution prior to the tax deadlines, but am just now correcting my return for the additional income. Thank you for any help.

Best answer by DanaB27

Please make sure you click continue after you added the 2024 Form 1099-R to get to the "Did you use your IRA to pay for any of these expenses?" screen. Here you will enter the amount of earnings under "Corrective distributions made before the due date of the return". This will enter the exception on line 2 of Form 5329 and you no longer have the 10% penalty calculated on line 4.

Please make sure you click continue after you added the 2024 Form 1099-R to get to the "Did you use your IRA to pay for any of these expenses?" screen. Here you will enter the amount of earnings under "Corrective distributions made before the due date of the return". This will enter the exception on line 2 of Form 5329 and you no longer have the 10% penalty calculated on line 4.

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