1099-R Question

[artp]

Client made excess Roth contribution in April 2021 and pulled it back out including any earnings prior to Dec 2021. The 1009-R showed $6683.24 in box 1, $o in box 2, Codes B and J in box 7. My understanding is nothing should be taxable and there should not be any excise tax accessed. I am concerned that the box 7 coding may trigger IRS excise tax. Is my concern valid? How to report it in Drake to avoid IRS query?

 

[jklcpa]

1 hour ago, artp said:

Client made excess Roth contribution in April 2021 and pulled it back out including any earnings prior to Dec 2021. The 1009-R showed $6683.24 in box 1, $o in box 2, Codes B and J in box 7. My understanding is nothing should be taxable and there should not be any excise tax accessed. I am concerned that the box 7 coding may trigger IRS excise tax. Is my concern valid? How to report it in Drake to avoid IRS query?

 

You should read the instructions for Part IV of From 5329, specifically the instructions for line 23 should help you.

[artp]

I need to clarify. The contribution was $7000 and there was a loss on the investment so the net amount withdrawn as $6683.24. The client is 65. I do not see where a entry would be required on either Form 5329 or 8606. When I made the entries from the 1099-R in Drake as outlined above, there is nothing taxable, which is correct yet I still have concerns with the coding in box 7 that may cause an issue with the IRS trying to access tax on this transaction.

[jklcpa]

Answered here: