Excess Roth Contribution Removal Filing Question
Husband/wife each contributed $1,200 to a Roth IRA in 2010. Realized recently that they made too much money to contribute to a Roth. The contributions were recently removed. However, there were no earnings, since the contributions had been invested in an equity fund, which has declined in value. Custodian removed approx $1150 from each IRA. Is there any filing requirement, since there were no earnings on these contributions, and they were removed before October 15th?
Permalink Submitted by Alan Spross on Thu, 2011-09-29 18:42
There is no form to report this on. However, the Form 8606 Inst. indicate that each taxpayer should include an explanatory statement regarding the recharacterization, eg ” On xx/xx/2010 I contributed 1,200 to my Roth IRA, and on xx/xx/2011 I distributed the full excess contribution, which was then worth 1,150″.
Since there were no earnings, there is no need to amend the 2010 return. Include the statement with the 2011 return if taxpayer does not want to send in just the statement by itself. That will help the IRS square up the 1099R issued in Jan, 2012 with respect to any concern about an excess contribution.