I have a few questions on how to properly report some withdrawals of Roth excess from 2021-2023. I had a 2021 excess of $2528, a 2022 excess of $6000, and a 2023 excess of $400.

In 2023, before the 2022 tax deadline, I withdrew my 2022 excess of $6000 minus losses, and reported that on line 4a (nothing on 4b as there were no gains) on my 2022 tax return. Then, before the end of 2023, I withdrew the excess $400 (excess from 2023) plus gains, AND the 2021 excess of $2528. I reported the $2528 excess on amended 2021 tax return form 5329 and 2022 tax return form 5329 and paid 6% for each year.

So, I received three 1099-R’s:
1. Coded J8 – distribution of $400 plus gains. (With the taxable amount (the associated gains) in box 2a)
2. Coded JP – distribution of $6,000 minus losses.
3. Coded J – distribution of $2528, with ‘Taxable amount not determined’ box checked.

With the tax software I’m using, if I report these 1099-R’s with their appropriate codes, it seems to want to put each distribution on line 4a, form 5329 section 1, and form 8606. However, I don’t think that’s correct. I believe the only thing that should go on part one of form 5329 is the gains associated with $400 distribution with code 21 selected, and the gains exempted from the 10% penalty (according to SECURE 2.0) (I’m not even sure that needs reporting on 5329, but the tax software placed it there). I did complete part 4 of 5329 stating that the $2528 excess was distributed, thus ending the 6% penalty.

Now – when I input my 1099-R code J8 it wants to transfer the information to form 8606, which I believe is also incorrect. I believe I only need to put the $400 distribution + gains on line 4a and 4b. The gains would be included on 4b and form 5329 Part 1 with the appropriate code excluding the 10% taxation. Is that correct?

With my 1099-R coded J (the 2021 excess of $2528), it also wants to carry that information over to form 5329 part 1 (but I think I found a way in the software to not transfer that information). I believe, for this distribution, I only need to complete form 5329 Part 4 (showing that the excess was withdrawn) and 8606 Part 3, including my Roth basis and thus not paying any extra tax, as it was a distribution of a prior contribution. Then, would I also include this excess on line 4a – so that 4a would be a combination of my 2021 excess distribution and my 2023 excess distribution (a total of both the excess and gains distribution from 2023 + $2528 on line 4a?) with only the gains on line 4b?

Then, can I effectively ignore the 1099-R coded JP, as I filed that on my 2022 taxes on line 4a, with $0 on 4b (thus nothing on form 5329 Part 1), as there were associated losses instead of gains? Anything else I need to do with that 1099-R code JP? And I don’t need to amend my 2022 tax return, correct?

So to sum up:
-for the 2021 excess reported on 1099-R code J (for the distribution after tax deadline): report on line 4a on 1040, and 8606 part 3 (reporting the Roth basis, and no 10% taxation). And, on 5329 part 4, show that the amount was distributed, so no more 6% penalty.

-for the 2022 excess reported on 1099-R code JP: ignore the 1099-R, don’t report on like 4a or 8606, as I reported it on 2022 taxes line 4a.

-for the 2023 excess reported on 1099-R code J8: report total distribution on like 4a and gains on 4b, and gains again on form 5329 part 1 using code 21 showing that I don’t need to pay the 10% penalty – along with an explanation of the distribution.

—Do I include any other distributions on form 5329 part 4? Or only the 2021 excess?

—Do I only include the 2021 excess distribution on form 8606 part 3?

-so, no more fees or penalties, and I don’t need to do anything else regarding the reporting of Roth excesses, correct?

(sorry for the lengthy post!)