Excess Roth IRA contribution 2023

Forum|Forum|1 year ago
May 20, 2024
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We had an excessive Roth IRA contribution for 2023. We didn't discover this until filing taxes. Our investment firm removed the excess before filling date. The excess contributions were $15,000 (7500 each, MFJ). The earnings were roughly $2300 and change. I owe tax on this but am unsure of the best way to handle this without paying a penalty. I won't receive a 1099-R until Jan/Feb of 2025. I have letters from the brokerage firm, EJ, indicating the excess contributions and earnings on said accounts. Can I file an amended return for 2023 using a substitute 1099-R (IOW, I'd just enter contributions on line 1 and earnings in 2b), let TT figure out the additional tax owed (roughly $600) and just make a direct payment to IRS or should I wait until I receive the 1099-R and file with my 2024 return? Any insight would be greatly appreciated

fanfare

Employee

"let TT figure out the additional tax owedet TT figure out the additional tax owed (roughly $600) and just make a direct payment to IRSand just make a direct payment to IRS"

That's exactly what you will be doing whether you do it now or later.

If you do it now, you can take advantage of e-File of 1040-X which lasts until Oct 15th.

"(roughly $600)"

not good enough, you must enter the exact amount of positive earnings.

You can get that by subtracting your contribution from the amount the custodian returned to you.

If you get the correct result on Form 1040, it doesn't really matter what 1099-R box 7 codes you use.

@txpharmguy0330