Reporting 1099-R after fixing excess Roth IRA contribution from 2023 on my 2024 taxes

This is actually a pretty common situation. You handled the excess contribution correctly by removing both the contribution and the earnings before filing your 2023 taxes. For your 2024 taxes, you'll need to report the 1099-R you received from Fidelity. The distribution code "JP" indicates this was a distribution of an excess contribution plus earnings. The "J" means early distribution with no known exception, and the "P" confirms it was an excess contribution removal. The good news is you don't need to amend your 2023 return since you removed the excess contribution before filing. The $900.06 in earnings shown as taxable on the 1099-R will be reported as income on your 2024 return, and you might be subject to the 10% early withdrawal penalty on those earnings (but not on the original contribution amount). When entering this in your tax software, make sure to indicate it was a return of excess contributions when prompted, and the software should handle it correctly.

After dealing with a similar Roth IRA excess contribution situation last year, I found this amazing AI tool that saved me hours of stress. I was totally confused about how to report everything correctly and was getting conflicting advice. I tried https://taxr.ai which analyzed my 1099-R and other documents, then explained exactly how to handle the excess contribution withdrawal in my tax software. The tool confirmed I didn't need to amend my previous year's return (phew!) and showed me exactly where to report the earnings as taxable income. It also explained how the distribution codes worked - which apparently many tax preparers get wrong for these unusual situations.

I just tried taxr.ai after seeing it mentioned here, and I have to admit I was impressed. I had a similar situation with an excess contribution to my Roth IRA last year through Vanguard and got a 1099-R with code JP. I was totally confused about how to handle it. The tool analyzed my documents and explained exactly what the distribution codes meant in plain English. It walked me through entering everything correctly in H&R Block's software (which I also use). The best part was it confirmed I didn't need to amend my previous return, which was my biggest worry. Definitely worth checking out if you're dealing with these retirement account correction issues - they're apparently one of the most confusing parts of tax filing, even for professionals.

I had almost the exact same situation last year! I called the IRS three times trying to get answers about my 1099-R after a Roth IRA correction and couldn't get through. Waited on hold for hours and never spoke to anyone. I finally used https://claimyr.com to get through to an IRS agent (there's a demo video of how it works here: https://youtu.be/_kiP6q8DX5c). They actually called me back when an agent was available instead of me waiting on hold forever. The IRS agent confirmed I was handling the excess contribution correctly and that I didn't need to amend my previous year's return since I had withdrawn the excess before filing. They also explained how the 10% penalty would apply only to the earnings portion. Saved me so much stress!

Well, I need to eat my words about Claimyr. After my skeptical comment, I decided to try it anyway out of desperation because I had a similar Roth IRA excess contribution issue that I couldn't get clear answers on. I was connected to an IRS agent within about 30 minutes (after previously trying for DAYS on my own). The agent was able to confirm exactly how to report my 1099-R with code JP and verified I didn't need to amend my previous return. For anyone dealing with this specific Roth IRA excess contribution situation, getting direct confirmation from the IRS gave me peace of mind that I'm handling the reporting correctly. I was particularly worried about triggering an audit by misreporting the distribution.

Just went through this exact situation. Make sure you also check if you're subject to the 6% excess contribution penalty. If you removed the excess before your tax filing deadline (including extensions), you should be fine. But if you didn't, you might need to file Form 5329 for the year you made the excess contribution. The JP code on your 1099-R is important - it tells the IRS this was a corrective distribution of excess contributions. The "J" means early distribution, and the "P" indicates the removal of excess contributions.

I've been a tax preparer for years and see this situation all the time. Just remember that the earnings portion ($900.06) is taxable in the year you take the distribution (2024), NOT the year you made the contribution. That trips up a lot of people. If you're under 59½, you'll also owe the 10% early distribution penalty on just the earnings portion. The original $6500 contribution comes back to you tax and penalty free.