excess roth contributions

[Jackie66]

How do I enter earnings on excess roth contributions in proseries, removed before the deadline for 2020 when I have no 1099R until 1/22?

[Just-Lisa-Now-]

Wont the earnings be on a 1099R for 2021 since thats when it was pulled out of the account?

[dkh]

You wait to enter on 2021 tax return when you receive the 1099R

[Jackie66]

They go on a 2022 1099R with a code 8 to report the the earnings but the earnings go on the 2020 tax return.

[Jackie66]

They belong on the 2020 tax return.

[Just-Lisa-Now-]

Thats not been my experience.

[qbteachmt]

From: https://www.irs.gov/instructions/i5329#idm139986644641968

Line 23:

You can withdraw some or all of your excess contributions for 2020 and they will be treated as not having been contributed if:

• You make the withdrawal by the due date, including extensions, of your 2020 tax return; and

• You withdraw any earnings on the withdrawn contributions and include the earnings in gross income (see the Instructions for Form 8606 for details). Also, if you hadn’t reached age 59½ at the time of the withdrawal, include the earnings as an early distribution on line 1 of Form 5329 for the year in which you report the earnings.

Here:

https://www.taxact.com/support/1280/2016/ira-or-roth-ira-excess-contributions

If you need help computing the Earnings, the IRS has Pubs 590A and B for retirement account management, and see this article:

https://www.investopedia.com/articles/retirement/04/042804.asp

[JRC]

Report the earnings using the 1099R entry worksheet:

Select the NON-Standard form box on the right side.

You should be able to locate their EIN form the Contribution forms.

Distribution Codes #8 and #J

If Under age May be subject to the 10% penalty

[123456]

No, the earnings are taxable in the year the excess contribution was made.

[qbteachmt]

Earnings are taxable in the year earned and in every year following, until they are removed. It's supposed to be burdensome for a reason.

[123456]

You need to make up a 1099-R and enter it in ProSeries for the year the excess contribution was made, not when it was withdrawn.

[123456]

I'm not sure what you mean by "that's not been my experience". Where did your experience come from? Here's word for word the information in IRS Publication 590-A - 

Earnings Includible in Income
You must include in income any earnings on the contributions you withdraw. Include the earnings in income for the year in which you made the contributions, not the year in which you withdraw them.

[qbteachmt]

@123456 

You mostly are discussing this with yourself, because this topic is from April 2021 and had stopped being active. I would imagine, by now, these returns got filed.

And I would not suggest "calling out" anyone's "experience." Thank you for participating in the peer community, but we don't need to draw swords. Providing guidance and references, really helps everyone.

[East Coast CPA]

It doesn't matter that the original returns that prompted this person's question have already been filed. Many search these pages for answers because they have the same questions on a current year return. I'm asking what basis you had for believing it should be taxed in the year withdrawn. Had you researched this at some point in the past and found conflicting information? The IRS publication has always instructed it to be taxed in the year the excess contribution was made, but if you have information that states otherwise please share the source.

[qbteachmt]

"I'm asking what basis you had for believing it should be taxed in the year withdrawn."

And I have no idea who "you" is that you think you are responding to, since this in an internet community forum of peer users and when the topic originated in April 2021, Five people participated prior to your recent input here.

We are all "you" in this forum. And I think you are asking Lisa, without taking into consideration she learned from this topic. Because that is what this forum is for: we learn from each other.

It's a moot point, a year later.

[123456]

I did learn from this forum, and that was appreciated. However, it is best to put accurate advise out there and yours was not accurate to the best of my knowledge. You have responded by insulting me for questioning your advise, but you have not responded on where you originally got the information that this was taxable in the year withdrawn, not the year the original excess contribution occurred. I am always open to listening when someone has valid information that contradicts what I have been using to prepare returns, which was why I asked.

[qbteachmt]

"and yours was not accurate to the best of my knowledge."

I still think you are responding to the wrong person. You quoted Lisa here: "I'm not sure what you mean by "that's not been my experience". "

"You have responded by insulting me for questioning your advise,"

I never insulted you, or anyone, for advice. I am the one that Thanked You for your participation. Did you not read that part? It's in this topic.

I also pointed out you were talking to yourself, since no one else had been in this topic since April 2021.

"but you have not responded on where you originally got the information that this was taxable in the year withdrawn"

Because that was not Me. My input was copied and pasted from IRS resources, so that's hard to get wrong. As one of Five people contributing, it matters who you think "you" is.

And I pointed out there is no need to be carrying on like this, now, or to try to engage them in correcting something, because you seem to be stating a challenge to "Prove It" with this comment: "but if you have information that states otherwise please share the source."

Your input here has clarified the situation. There is no need to rehash or autopsy something from April 2021. You are the only new input here. It's not a discussion. It's a Zombie Topic, now.

Thank you for the update, but let's not keep beating at the door.