In 2006 I over-contributed $2400 to a Roth IRA. So in 2007 I removed the excess contribution and filed a 2006 Form 5329 to pay the 10% + 6% penalty .
I still received a 2007 1099-R for the removal of my excess contributions. Can I ignore it for my 2007 return since I already took care of it with my 2006 5329?
Something doesn't sound right. If you corrected the excess contribution and the earnings on it by the extended due date of your 2006 return you didn't owe the 6% penalty. (It makes a difference in what you need to do on your
2007 return.)No, don't ignore it. What's the code in Box 7?
I corrected the 2006 excess contributions in 2008, so I think the 6% penalty did apply.
The code in Box 7 is N. If I report this 1099-R , won't the IRS be expecting the 10% early withdrawl penalty ( which I already paid ? )
At the moment the "what to do with the 1099" cart is miles ahead of the "what happened?" horse. Your explanation makes no sense.
Nothing you did in 2008 would be reflected on a 2007 1099-R. The code on the 1099-R that you have indicates a 2007 recharacterization. (That code is not necessarily right, but it doesn't match your account of what happened, which would have resulted in no 2007 1099-R being issued.)
Please provide a complete timeline, with amounts, of what happened, starting with the 2006 tax year.
contribution
If your correction of the 2006 problem wasn't until 2008, you may owe another 6% in 2007.
You are right, I was confused and thought my 1099-R for 2007 was for the excess contribution I took out from 2006. It is actually for when I converted my 2007 roth IRA to a traditional IRA . Sorry for the confusion..
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