Question

Contributed too much to Roth IRA in 2020. It was instead applied to the next tax year. Is it taxable?

Forum|Forum|5 years ago
February 24, 2021
1 reply
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Hi. I contributed too much to my Roth IRA in 2019. I called Fidelity and they instead applied the excess to the tax year 2020. So that money never left my Roth IRA retirement account, it was just applied to the next year. This year, I received a 1099-R saying that excess contribution was a distribution. But is it really a distribution, and taxable, if that excess money never left the Roth IRA, and instead was applied to next year? Turbo Tax is counting that "distribution" as taxable income.

Not A Product Question

DaveF1006

You can declare this distribution as a rollover to avoid taxation.

Log into turbo tax
Go to federal>income and expenses
Retirement plans and Social Security>show more
Ira (401K), pension plan Withdrawals(1099R) revisit
On your 1099-R summary screen, review the 1099-R that you described above
Scroll through the screens until you reach a screen that says Tell us if you moved the money through a rollover or conversion
Here you will check the first box that says rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days
Next screen asks Did you rollover the gross amount of $XXXX.XX(Box 1) to another retirement account?
Here is where you will select Yes, I rolled over $xxxxx.xx to an IRA or other retirement account (or returned it to the same account) using my own money.

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A

annnna26Author

Thank you so much for your instructions. I'm using Turbo Tax Home and Business 2020 and I can't find that sequence of questions. From the 1099-R summary screen it only asks if I took a Disaster return and then brings me back to the home page. Where do I find the option to tell them I moved money through a rollover or conversion?

DaveF1006

At you 1099-R summary screen, select edit next to the 1099-R and continue through the form.

Until you reach a screen that asks What you did with the money. Here you will say you moved the money to another retirement account or (returned to the same retirement account).

Then a drop-down will appear and you can say you rolled over all the money. Here is what this page looks like in your 2020 Home and Business version.