Retirement Savings and Benefits
Questions and comments about IRAs, 401k accounts, social security, and other forms of retirement savings and benefits.
Re: 1099-R code "E" to correct a previous mistake
Posted by: skitaxq99, September 6, 2017 02:21AM
Thank you again Alan S. for the quick responses. It's very helpful!

I'm filling out the form to remove the excess. There is a question "What is your tax filing deadline for year of excess?". and followed with 2 options: "This excess correction is on or before my tax filing deadline - refund excess plus earnings", "This excess correction is after my tax filing deadline - refund excess only (no earnings)". What should be considered my filing deadline?
Since I did not file extension. Should the regular 4/18/2017 be my filing deadline or 10/15/2017?

You mentioned Oct. 2017 as due date. and if removal after the due date, there would be no earnings come out, only $500 as regular distribution. since my excess would be associated with loss, then either way (before due date, or after but before 12/31), I would need to pay the tax on same amount of $500. What is the difference before or after due date? would there be 6% excise tax if remove after due date?

Many Thanks,

Re: 1099-R code "E" to correct a previous mistake
Posted by: Alan S., September 6, 2017 03:54AM
The deadline is 10/15/2017 which is the extended due date when you file on time, which you did. So check the "on or before" box. You will get back less than 500 if you have a net earnings loss on the excess IRA contribution.

Do not let 10/15 go by or you will then be after the due date, and have to take the full 500 out and pay a 2016 6% excise tax as well.

Re: 1099-R code "E" to correct a previous mistake
Posted by: skitaxq99, September 7, 2017 02:11AM
Thank you Alan S. for your knowledgeable advice! I just sent the corrective distribution form to request removal of the excess from my rollerover IRA account. They said it would take a couple of weeks to process. Hopefully it'll be before the due date.
I've been clueless for several weeks, called IRS, they said they do not provide Tax advice after Apr.15th. :-( Now, finally get it moving. Really appreciate your help!

Best Regards,

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