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Old 02-01-2014, 07:55 PM
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Join Date: Feb 2014
Posts: 1
Removal of excess roth ira contribution with earnings

Hello, I reviewed the posts but didn't see this particular question covered so thought I'd ask:

In Jan of 2013, I contributed $5500 to a Roth IRA. Realized in Jan of 2014 that we exceeded the AGI limit so withdrew it plus $1300 earnings (filled out the company's Removal of Excess IRA contribution Form).

I know that I need to report the $1300 as income and probably pay a 10% early withdrawal penalty on the earnings (age is less than 59 1/2). I shouldn't have to pay the 6% excise penalty on the principal ($5500) or earnings ($1300) since it's being withdrawn prior to filing my 2013 taxes.

Sound right so far? What 2013 tax return forms do I need to complete? Is the following right?

Fill out the 5329 form to populate the 1040A lines 15a, 15b? Where 15a = 5500+1300=6800 and 15b (taxable amount) =1300?

Since the transaction to withdraw the excess is happening in 2014 (to remove the 2013 excess), will the company where my account is issue me a 1099-R in Jan of 2015? If so, how do I handle it at that time when completing my 2014 return? I’m guessing that they will issue a 5498 so wasn’t sure if they’d also issue a 1099-R or not and if I would need to include the 1099-R values (if issued) on my 2014 taxes or if I can just ignore it (since filling out the 5329 on my 2013 return). I wouldn’t want to pay taxes twice on the earnings amount since I’m reporting it as income this year using the 5329 already. I would also like to avoid having to file an amended 2013 return next year so want to get it right this time, accounting for any forms that I'll get next January (if any). Would I need to fill out a form 4852 (substitute 1099-R) and include with my 2013 return? I also saw form 8606 mentioned but don't believe my situation requires it.


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Old 09-08-2014, 09:08 AM
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Join Date: Sep 2014
Posts: 3
Reporting to IRS for removal of excess ROth contribution

We are in the exact same situation. I filed an extension so I could figure out how to report this. Would you be kind to share how you finally reported this? Also, what do you do when you get the 1099r in Jan 2015? Appreciate your help in advance.

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