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Dummy 1099-R for excess Roth Contributions

Shellbell60

I removed excess 2023 Roth contributions in January of 2024. I will not receive a 1099-R from Vanguard until 2025. Can I create a dummy 1099-R to pay tax on my 2023 earnings or do I need to wait for the official 1099-R and file an amended return? Is there some other way to claim the income on the 2023 earnings?

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Accepted answers

KristineS

Hi shellbell60,

Thanks for writing in with your question. There's no need to create a dummy 1099-R.

By removing your 2023 excess contribution and any earnings before the April 2024 deadline, it's considered a return of contribution, and you avoid the 6% penalty tax. If you made any interest on the contribution it's reported and taxable on your 2023 tax return.

In FreeTaxUSA report both your contribution and withdrawal using this menu path:

Deductions/Credits > Common Deductions/Credits > IRA Contributions

Enter your 2023 Roth contribution and follow the prompts indicating you withdrew your contribution before the April due date.

For earnings, "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." You'll report the interest (earnings) on your 2023 tax return. If the Roth IRA custodian has not determined that amount for you, use IRS Publication 590-A, Worksheet 1-4 on page 30, and include the interest under the Income section.

Next year in 2025 when you receive your 1099-R, you'll report the information on your 2024 tax return as a non-taxable event. You will not need to amend your 2023 tax return.

All comments

KristineS

Hi shellbell60,

Thanks for writing in with your question. There's no need to create a dummy 1099-R.

In FreeTaxUSA report both your contribution and withdrawal using this menu path:

Deductions/Credits > Common Deductions/Credits > IRA Contributions

Enter your 2023 Roth contribution and follow the prompts indicating you withdrew your contribution before the April due date.

Next year in 2025 when you receive your 1099-R, you'll report the information on your 2024 tax return as a non-taxable event. You will not need to amend your 2023 tax return.

Shellbell60

Thank you!! I feel better about not creating the 1099. I appreciate your help. Would the earnings be listed under "Interest Income"?

KristineS

https://community.freetaxusa.com/discussion/comment/2809#Comment_2809

You'll want to double check with your custodian on the type of earnings. If the gain is interest, yes, Interest Income, if dividends, you'll report that as Dividend Income (qualified/ordinary) and so forth.