Question

I didn't know I could not add to my IRA. I put $11,000 in and then read I had done it wrong so I put back into Brokerage acct. Will it be taxed twice???

Forum|Forum|5 years ago
April 18, 2021
1 reply
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TurboTax Premier Online

If you made an excess contribution and requested to remove the excess contribution plus earnings with your bank then only the earnings will be taxable. If you are under 59 1/2 you will also pay the 10% early withdrawal penalty on the earnings. If you made the contribution in 2020 then you will have to include this on your 2020 tax return.

Did you just remove the the contribution or did you request the withdrawal of excess contribution and earnings? This is important how the IRA custodian codes the 1099-R that you will get. Did you withdraw it in 2020 or 2021?

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N

nan3332Author

I added this to my account in 2021 for 2020. When I realized that I was no longer able to to add to the IRA, I removed the money 24 hours later. I'm not there were no earnings, no change to the fund. Still not sure how to report. Thanks for your previous answer.

DawnC

Employee

You don't need to report anything on this tax return. Next year, you will receive a 1099-R that will need to report. Make sure the financial institution knows that the removal was for an excess 2020 contribution/earnings. Otherwise, as Dana stated above, the form you receive next year may be coded incorrectly.

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