Roth IRA Excess Contribution

splat2030
splat2030 Member Posts: 1 Newcomer
edited June 5 in Filing my taxes

Hello,

I contributed the maximum to my Roth IRA for this year in Jan, and discovered that my income will exceed the $155k single filer limit by the end of the year after performing a large Roth conversion in my 401K. Will I receive a 1099-R before the April 2027 filing deadline if I remove the excess contributions and earnings before the end of 2026, or will I have to wait until 2028 and deal with an amended tax return? How would I go about reporting the excess contribution on my tax return assuming I get the correct 1099-R form on time, or in the event that I don't get it?

Answers

  • GregW
    GregW Star Posts: 6 image

    Just to be clear, the amount you can contribute to a Roth IRA as a single filer phases out from $153k to $168k for 2026. If you withdraw the excess before the end of the year, it will be reported on your 1099-R in early 2027 with code J8. Be sure to tell the trustee why you are making the withdrawal, and ask that they calculate and distribute the earnings as well as the excess contribution. The total distribution will be reported in Box 1. Any earnings will be taxable and will be reported in Box 2a. You don't otherwise report the excess contribution and just report the 1099-R as received. It is recommended that you add an explanation.

    If you wait until after the first of next year to withdraw the excess, it becomes more complicated. There is no penalty if you withdraw it by the due date of your return. You won't receive the 1099-R until early 2028, but it needs to be reported on your 2026 return. If you can determine the earnings and other items that will be on the 1099-R, you can go ahead and include it on your 2026 return. Use code JP for box 7. But if you get the earnings wrong, you will have to amend the 2026 return when you actually get the 1099-R.

  • JanaA
    JanaA FreeTaxUSA Agent Posts: 181 image
    Hello splat2030! GregW is correct. For the same-year withdrawal, the total distribution goes in Box 1, only the earnings go in Box 2a, and you simply report the 1099-R as received. Adding an explanatory statement is a good idea. For the next-year scenario, you're right that you can estimate the earnings and include a placeholder 1099-R on your 2026 return to avoid amending later, but if the earnings figure turns out to be wrong, an amended return will be necessary once the actual 1099-R arrives in 2028.

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