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Let me pull up my copy of TurboTax, and I'll check the details.
Is this an IRA you rolled the 401(k) into, or an actual rollover 401(k)?
this is an IRA that I rolled my 401k into around sept 2010
If you withdraw the excess contributions by April 18, there's no penalty. When you enter the 1099-R, it should automatically transfer to the IRA contribution worksheet, and hence to form 5329.
If that doesn't work, you can correct the IRA contribution worksheet to reflect the withdrawal.
I have a 1099-R for the rollover from my 401k from my previous employer
I then transferred additional money into the account (which is the excess)
Do I enter a new 1099-R?
for the contribution/withdrawal?
No, I found it on the IRA contribution worksheet.
Line 1 is where you report the additional contributions, and line 6 is where you report the withdrawal of the excess contribution.
how do I get to that form?
I got to it by going into forms mode.
And selecting "IRA Contribution Worksheet"
There must be a way of getting to it in interview mode, but it may be easier to find it in forms mode.
i found it in the forms mode...but am at a loss as to how to fill it out...do you have any idea on how to get to it in interview mode?
also, line 6 doesn't let me report any capital losses to my excess contribution...
The help screen in interview mode after you report the excess contribution says that entering the 1099-R for the withdrawal should handle it.
so, should I create a new 1099-R?
also, here is my key confusion
It also says that if you don't get a 1099-R, you can just re-enter the correct IRA contribution total by subtracting the amount of the withdrawal.
I'd put supporting documentation on that item, so you don't forget what happened.
I submitted $5,000 in excess contributions, than invested that in a security that basically lost all of its value...the remaining value is approx $200. I would like to "withdraw" my excess contribution which amounts to (now) $200 plus a $4800 tax loss
this is something I can put on my broker's paperwork, but I can't find the matching tax forms for the reporting of it
Let me check publication 590 for the correct way to report a loss on an excess distribution. One moment.
It looks as if you can recover the loss. The simplest way to do it is to enter a fake 2011 1099R; with your numbers, box 1 is $200, box 2a is -$4800, and use codes P and 2.
Who do I put in as the Payer? myself?
also, code P = return of contribution taxable in 2009 (ie not 2010)?
shouldn't it be code 8?
Payer should be the IRA custodian, and when you enter a code P, TurboTax will ask you whether it's a 2010 or a 2011 1099-R. You tell it 2011, so that code P means it's taxable in 2010.
I'm sorry, you didn't specify which year you withdrew the excess contribution.
sorry...I am going to withdraw it tomorrow...
If it was 2010, you enter a code 8. If 2011, a code P, and TurboTax will ask you which year you meant.
You can file for an extension and wait for the 1099-R, if you prefer. You should get it shortly.
this is frustrating...turbotax doesn't calculate any impact to the taxes due as a result of this (despite the fact that I have a large taxable gain)...
(give me a moment to reply what you just typed...) The 1099-R will give the precise numbers; you may need to amend the return if your estimate is incorrect.
Does entering a fake 1099-R remove the penalty on form 5329?
it never had me enter 5329...let me go ahead and manually fill that out
shouldn't this also cancel out some of my capital gains?
It should come out as an ordinary loss, rather than a capital loss.
In regard the 5329, I thought you said you had excess contributions?
I guess I don't understand the difference between an ordinary loss and a capital loss...
I did...I contributed $5,000 excess...or atleast that is what I understand to have happened...
ok...I contributed through my paycheck deductions to my 401k + $5,000 from my bank
my understanding is that the contribution limit is $5k in total, so I am over by the amount I contributed of my own money
Not exactly. Rollovers (direct or indirect) don't count against the $5K limit. Your contribution of $5K is only excess if it exceeds your earned income. If your MAGI (Modified Adjusted Gross Income) is too high, you may be restricted from making a deductible IRA contribution, but not a non-deductible IRA contribution.
It should be noted that if your $5K was originally reported as a deductible IRA contribution, the withdrawing it reverses that deduction, so it should slightly (because there's only $200 left) increase your tax.
I am in the category for 2010 for someone with a MAGI that is too high
I have no idea how schwab reported it...I haven't received any paperwork from them w.r.t. this contribution...and they won't know what tax bracket I am in anyway...
Whether it's a deductible or non-deductible contribution is up to you; Schwab doesn't know. If you look at your IRA contribution entry sheet, you'll see that you have an option to denote the contribution as non-deductible, in whole, or in part.
ok, so I need to report it as deductible?
in the fake 1099 i created?
The fake 1099R shouldn't need to specify whether it was deductible. You might have attempted to declare the $5K a deductible IRA on the contribution worksheet, but it sounds as if it wouldn't work.
I am very confused and my brain is no longer working
you have gone way above and beyond my original question and for that ... thank you very much
may I reply to you tomorrow evening and see if we can straighten out this mess?
OK. I'm not on here 24/7, but I'll try to get back to you as soon as I can, after seeing your reply.