Roth IRA

Forum|Forum|10 months ago
May 8, 2025
1 reply
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After filing our 2024 return we found out that the Roth IRA contribution we made in 2024 isn't allowed due to our AGI being over the limit. We removed the funds plus earnings from the account and received a 2025 1099R. Do we need to amend our 2024 return and pay the penalty or wait until 2025 to file and claim the penalty then? Thak you.

fanfare

Employee

If you timely filed ( April 15) you have until Oct 15 to remove the excess plus earnings, which you did, without penalty.

if the earnings were greater than Zero, that is a taxable amount to be reported on your 2024 tax return via Form 1040-X.

@MsSlowky

Usually the true 2025 1099-R comes in February 2026. What are you looking at and what is the taxable amount shown?

MsSlowkyAuthor

I've got a 1099 R for 2025 which shows the gross distribution (contribution + earnings) in box 1 and the earnings only on in box 2a. I can amend 2024, but the 1099R is for tax year 2025 which would also be reported in tax year 2025 so it seems like a duplication. The majority of the earnings would be for 2024, but there would be 4 months of 2025 earnings too. I don't have separate 1099R's for 2024 and 2025 breaking out the earnings by year. I was told we'd have a 6% penalty on the contribution error but I'm not sure if it should be in 2024 amended or 2025 tax year. What are your thoughts? Thank you.

fanfare

Employee

if the earnings Box 2a were greater than Zero, that is a taxable amount to be reported entirely on your 2024 tax return via Form 1040-X.

It is not usual to get a 2025 1099-R now. Maybe the custodian is giving you a heads up as a courtesy.

It is probably not sent to IRS yet.

If the custodian is a bank it is not unusual for the bank to give you incorrect advice. There is no penalty if you filed your 2024 tax return on or before April 15th, or you requested an extension of time to file and the ontribution was for 2024, not for 2023.

Please state the disitrbution code(s) in box 7 of this 1099-R and the amount in Box 2a.