Need help with 1099-R entries for removal of excess after-tax contribution

[worthit]

Hello BHs:

I am looking for confirmation that my entries are correct for the 1099-R I am generating.

1. I contributed $20647 into the after- tax sub account in December 2021.

2. Rolled over into a Roth IRA subsequenty.

3. Removed the execss in July 2022 and received a 1099 in January 2023 with $16443.20 in Box 1 (there was a loss of $4204.80) with a code of PJ in Box 7 from the custodian.

4. But now I need to generate a 1099-R for the excess contribution as the administrator as I understand.

So here is what I am thinking as entries for the 1099-R I am generating:

Box 1 = $20647
Box 2a = $0
Box 2b = $0
Box 3 = $0
Box 4 = $0
Box 5= $20647
Box 6 = $0
Box 7 = P
IRA/SEP/SIMPLE - Unckecked

Is this correct?

Thanks.

[Duckie]

I am looking for confirmation that my entries are correct for the 1099-R I am generating.

1. I contributed $20647 into the after- tax sub account in December 2021.

Are you self-employed or W-2?

2. Rolled over into a Roth IRA subsequenty.

3. Removed the execss in July 2022 and received a 1099 in January 2023 with $16443.20 in Box 1 (there was a loss of $4204.80) with a code of PJ in Box 7 from the custodian.

What excess? Did you contribute to the after-tax account when you didn't have enough income to do so or did you go over the $58,000 limit?

4. But now I need to generate a 1099-R for the excess contribution as the administrator as I understand.

If you removed the excess in 2022 and it shows on the 1099-R you received this January, what other excess do you need to report?

[worthit]

Thanks. My responses are in red.

I am looking for confirmation that my entries are correct for the 1099-R I am generating.

1. I contributed $20647 into the after- tax sub account in December 2021.

Are you self-employed or W-2? This is for a solo 401k for which I am the administrator

2. Rolled over into a Roth IRA subsequenty.

3. Removed the execss in July 2022 and received a 1099 in January 2023 with $16443.20 in Box 1 (there was a loss of $4204.80) with a code of PJ in Box 7 from the custodian.

What excess? Did you contribute to the after-tax account when you didn't have enough income to do so or did you go over the $58,000 limit? Didn't have enough income

4. But now I need to generate a 1099-R for the excess contribution as the administrator as I understand.
If you removed the excess in 2022 and it shows on the 1099-R you received this January, what other excess do you need to report? As I understand this over contribution is a failed conversion. Therefore the 1st step should have a 1099 with the contribution amount in Box 1 and code P in Box 7. The 2nd step should have a 1099 with the removed contribution amount and codes PJ in box 7 received from the custodian. So it is the 1099 for the 1st step I am trying to generate.

[toddthebod]

I'm not an expert, but I just don't buy it. If I made an IRA contribution to an account at Vanguard, subsequently rolled it over to an account at Schwab, and then asked Schwab for a return of excess contributions, I would get a 1099 from Schwab but I would never hear from Vanguard. The contributions have been removed, it's been reported to the IRS, why does it need to be reported by two parties?

[worthit]

I'm not an expert, but I just don't buy it. If I made an IRA contribution to an account at Vanguard, subsequently rolled it over to an account at Schwab, and then asked Schwab for a return of excess contributions, I would get a 1099 from Schwab but I would never hear from Vanguard. The contributions have been removed, it's been reported to the IRS, why does it need to be reported by two parties?

Thanks for responding.

Interesting. But perusing all the forums and reading about it, my understanding is that as the administrator I would need to capture the contribution into the after-tax sub account on a 1099 with a code P since the money was moved from an after-tax account into a Roth. This is what I am looking to find out from the forum here.

I understand the removal of the contribution from Roth (Schwab in your example) and the resulting 1099 as you indicate. But it is the step before that I am not sure about.

[toddthebod]

I'm not an expert, but I just don't buy it. If I made an IRA contribution to an account at Vanguard, subsequently rolled it over to an account at Schwab, and then asked Schwab for a return of excess contributions, I would get a 1099 from Schwab but I would never hear from Vanguard. The contributions have been removed, it's been reported to the IRS, why does it need to be reported by two parties?

Thanks for responding.

Interesting. But perusing all the forums and reading about it, my understanding is that as the administrator I would need to capture the contribution into the after-tax sub account on a 1099 with a code P since the money was moved from an after-tax account into a Roth. This is what I am looking to find out from the forum here.

I understand the removal of the contribution from Roth (Schwab in your example) and the resulting 1099 as you indicate. But it is the step before that I am not sure about.

Where is this solo 401(k) set up? You did make a distribution from your plan, and that should result in a 1099, but that has nothing to do with excess contributions.

[worthit]

I'm not an expert, but I just don't buy it. If I made an IRA contribution to an account at Vanguard, subsequently rolled it over to an account at Schwab, and then asked Schwab for a return of excess contributions, I would get a 1099 from Schwab but I would never hear from Vanguard. The contributions have been removed, it's been reported to the IRS, why does it need to be reported by two parties?

Thanks for responding.

Interesting. But perusing all the forums and reading about it, my understanding is that as the administrator I would need to capture the contribution into the after-tax sub account on a 1099 with a code P since the money was moved from an after-tax account into a Roth. This is what I am looking to find out from the forum here.

I understand the removal of the contribution from Roth (Schwab in your example) and the resulting 1099 as you indicate. But it is the step before that I am not sure about.

Where is this solo 401(k) set up? You did make a distribution from your plan, and that should result in a 1099, but that has nothing to do with excess contributions.

The solo 401k is with Fidelity but I am the administrator. So it is just only one 1099 that reports the removal that need to be filed?

[toddthebod]

I'm not an expert, but I just don't buy it. If I made an IRA contribution to an account at Vanguard, subsequently rolled it over to an account at Schwab, and then asked Schwab for a return of excess contributions, I would get a 1099 from Schwab but I would never hear from Vanguard. The contributions have been removed, it's been reported to the IRS, why does it need to be reported by two parties?

Thanks for responding.

Interesting. But perusing all the forums and reading about it, my understanding is that as the administrator I would need to capture the contribution into the after-tax sub account on a 1099 with a code P since the money was moved from an after-tax account into a Roth. This is what I am looking to find out from the forum here.

I understand the removal of the contribution from Roth (Schwab in your example) and the resulting 1099 as you indicate. But it is the step before that I am not sure about.

Where is this solo 401(k) set up? You did make a distribution from your plan, and that should result in a 1099, but that has nothing to do with excess contributions.

The solo 401k is with Fidelity but I am the administrator. So it is just only one 1099 that reports the removal that need to be filed?

If this is the standard Fidelity solo 401(k), they will issue the 1099-R. Or is this a self-directed 401(k) that happens to have an account at Fidelity?

[worthit]

I'm not an expert, but I just don't buy it. If I made an IRA contribution to an account at Vanguard, subsequently rolled it over to an account at Schwab, and then asked Schwab for a return of excess contributions, I would get a 1099 from Schwab but I would never hear from Vanguard. The contributions have been removed, it's been reported to the IRS, why does it need to be reported by two parties?

Thanks for responding.

Interesting. But perusing all the forums and reading about it, my understanding is that as the administrator I would need to capture the contribution into the after-tax sub account on a 1099 with a code P since the money was moved from an after-tax account into a Roth. This is what I am looking to find out from the forum here.

I understand the removal of the contribution from Roth (Schwab in your example) and the resulting 1099 as you indicate. But it is the step before that I am not sure about.

Where is this solo 401(k) set up? You did make a distribution from your plan, and that should result in a 1099, but that has nothing to do with excess contributions.

The solo 401k is with Fidelity but I am the administrator. So it is just only one 1099 that reports the removal that need to be filed?

If this is the standard Fidelity solo 401(k), they will issue the 1099-R. Or is this a self-directed 401(k) that happens to have an account at Fidelity?

Self-directed 401k and I am the administrator.

[toddthebod]

Self-directed 401k and I am the administrator.

Then I'm going to leave this one alone. Good luck.