Reporting Timeline Return of Excess Contributions

windyskies

I recently performed a return of excess contribution from my Traditional IRA for 2024. Since this contribution received earnings, I'd like to report this as a 1099-R for my 2024 return (rather than waiting until next January to amend it). Which code should I use in box 7? Anything else I should know about how to enter this in FreeTaxUSA? This was a timely return of excess on a 2024 traditional IRA contribution. Thanks!

rachels

Hi windyskies,

If you withdrew the excess 2024 contribution between 1/1/2025 and 4/15/2025, then the earnings on that excess contribution are going to be taxable in the year of the contribution (so on your 2024 tax return).

You will want to file your return with the original contribution amount entered in the Deductions/Credits > IRA Contributions section of your account. On those screens, you will be asked if you withdrew the excess. You can indicate "yes" there, then enter the related withdrawal information.

For the earnings, those will need to be reported on your 2024 tax return after you receive your 1099-R next year. So, you would typically file your 2024 tax return this year, then amend it next year when you receive the 1099-R reporting the distribution of the excess and related earnings.

We generally do not recommend reporting a fake/dummy 1099-R because the IRS doesn't have that information yet.