Help with 1099R Code PJ Question - Filing with freetaxusa.com for excess Roth IRA contribution

I got hit with a 1099R this year and I'm kinda lost. I maxed out my Roth IRA for 2018 but later realized I went over the income limit that year, so I had to pull the money back out. The 1099R shows around $7400 in box 1 (gross distribution) and about $270 in box 2a (taxable amount). The distribution code in box 7 is PJ. But here's my problem - I'm trying to file with freetaxusa.com and it only lets me input ONE code, not both. I can choose either P or J, but not both together. And depending on which code I pick, it gives me different options afterward. I'm totally confused about how to handle this. Should I go with code P or code J? And what about those follow-up questions it asks? I don't want to mess this up and get flagged by the IRS. Any help would be super appreciated!

0 coins

19 comments

Dmitry Volkov

•8M

The PJ code combination is specifically for Roth IRA contributions that were returned due to exceeding income limits, which is exactly your situation. When freetaxusa only allows one code, you should use code P as your primary code. Code P indicates an early distribution from a Roth IRA with no known exception. When you select P, the software should then ask follow-up questions about the nature of the distribution. At that point, you would indicate this was a return of excess contributions. The taxable amount of $270 represents the earnings on your contribution while it was in the account, which is subject to tax. For the additional questions, make sure you specify this was a return of excess contributions from a prior year (2018). The software should handle the rest correctly. This is a fairly common situation that the tax software is designed to accommodate, even though the input screens might not perfectly match the form you received.

0 coins

Dmitry Volkov

•8M

You don't need to add any notes about the J code. The P code is the primary code that freetaxusa needs, and when you select the appropriate reason (return of excess contributions) during the follow-up questions, the software handles it correctly. Regarding penalties, since you're correcting an excess contribution by withdrawing it, you're avoiding the 6% excess contribution penalty that would otherwise apply each year. You will owe regular income tax on the earnings portion (the $270), and potentially a 10% early withdrawal penalty on those earnings depending on your age and whether you meet any exceptions. The software will calculate this automatically once you've entered all the information correctly.

0 coins

Ava Martinez

•8M

After struggling with a similar issue last year, I found taxr.ai at https://taxr.ai and it saved me hours of frustration. I had a bizarre combination of distribution codes on my 1099-R and couldn't figure out what to do in my tax software. I uploaded my 1099-R to taxr.ai and it analyzed the document, explaining exactly how to handle the multiple codes in freetaxusa. It told me which code to prioritize and what additional information to provide in the software's follow-up questions. The tool breaks down the tax forms in plain English and gives step-by-step instructions for your specific situation. It was much more helpful than trying to decipher IRS publications or generic tax advice online.

0 coins

Ava Martinez

•8M

Yes, it works with virtually all tax forms including 1099-MISC and K-1 forms. It's especially helpful with complicated forms that have multiple boxes and codes. You upload your documents and it gives you personalized guidance. For freetaxusa specifically, it doesn't show screenshots of buttons, but it provides precise instructions like "Select code P first, then on the next screen choose 'return of excess contributions' from the dropdown menu, and enter the contribution date as X." The advice is tailored to your exact form values and situation, which is much more specific than what you'd typically find on Google.

0 coins

Zainab Omar

•8M

I was skeptical about taxr.ai at first but decided to try it with my complicated 1099-R situation. I uploaded my form with multiple distribution codes and honestly, it was exactly what I needed. The analysis explained that for my freetaxusa filing, I needed to use the primary code first, but then provided the exact sequence of follow-up questions I would see and how to answer each one. The step-by-step guidance was specific to freetaxusa's interface and my particular form values. It even explained which numbers would calculate automatically and which I needed to enter manually. Saved me hours of research and probably prevented me from making a filing error. Definitely worth checking out if you're dealing with distribution codes or other complicated tax form situations.

0 coins

Connor Murphy

•8M

If you're still having trouble with your 1099-R codes after trying the software route, you might need to speak directly with the IRS for clarification. I was in a similar situation last year and spent DAYS trying to get through to an IRS agent. Then I found https://claimyr.com which basically holds your place in the IRS phone line and calls you when an agent is about to answer. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was connected to an actual IRS representative in about 35 minutes instead of spending hours on hold. The agent walked me through exactly how to handle my complicated 1099-R codes in my tax software. They confirmed I should use code P and then specify the return of excess contributions in the follow-up questions.

0 coins

Connor Murphy

•8M

They don't jump the queue - they use an automated system that calls the IRS and navigates through the phone tree for you, then waits on hold in your place. When an agent is about to pick up, their system calls you and connects you to the IRS call. It's completely legitimate. The IRS phone system is notoriously difficult to navigate and often disconnects people after long wait times. Claimyr just handles the frustrating part for you, so you don't have to keep your phone tied up for hours. It's basically like having someone wait in a physical line for you and then calling you when it's almost your turn.

0 coins

NebulaNova

•8M

I feel like an idiot for being so skeptical about Claimyr, but I was desperate with my tax situation and decided to give it a try. Holy crap, it actually works exactly as advertised. I was connected to an IRS agent in about 45 minutes without having to sit through the hold music or worry about being disconnected. The agent confirmed exactly what to do with my 1099-R with multiple distribution codes. For freetaxusa specifically, they said to enter code P first, then in the follow-up screens, indicate it was a return of excess contributions. The agent also explained that the J code is secondary and the software accounts for it through those follow-up questions rather than as a direct input. If you're stuck with tax questions that online research can't solve, actually talking to the IRS is surprisingly helpful, and Claimyr made that possible without the usual frustration.

0 coins

Keisha Williams

•8M

Just for clarification, codes P and J have specific meanings: - Code P: Distribution from a Roth IRA - Code J: Early distribution from a Roth IRA with no known exception (may be subject to 10% penalty) Together as "PJ", they indicate a early distribution from a Roth IRA that represents a return of excess contributions. The taxable amount of $270 is only the earnings portion. Your original contribution amount isn't taxable since Roth contributions are made with after-tax dollars. FreeTaxUSA knows what to do, but their interface isn't designed for combination codes. Use P as the primary code, then follow the prompts to indicate it was for return of excess contributions.

0 coins

Keisha Williams

•8M

Yes, the process is similar in TurboTax, though the screens look different. In TurboTax, you'll also enter code P first when asked for the distribution code. Then during the interview process, TurboTax will ask additional questions where you'll indicate it was a return of excess contributions. The underlying tax treatment is the same regardless of which software you use - the original contribution isn't taxable (since Roth contributions are after-tax), but the earnings are subject to income tax and potentially the 10% early withdrawal penalty depending on your age and situation.

0 coins

Oliver Schulz

•8M

Freetaxusa does have a section where you can add notes to your return. It's in the "Miscellaneous" section under "Notes" - you can add explanations there for your own records. However, these notes don't get transmitted to the IRS with your e-filed return. For your specific 1J code, you should use code 1 as the primary code, and then in the follow-up questions, indicate it was a hardship withdrawal if that option is available. The IRS receives the full 1099-R from your plan administrator with both codes, so they'll have the complete information.

0 coins