![]() ![]() To calculate the amount of the penalty that is eligible for the refund, you will need to complete Form 8606.īased on the information you provided, it appears that you had $22,000 in non-deductible contributions to your Roth IRA and made an early withdrawal of $17,000, on which you paid a $1,100 penalty. In your case, it sounds like you are eligible to claim a refund of the penalty because you had non-deductible contributions to your Roth IRA between 19. On Form 5329, you will report the amount of the early withdrawal penalty that you are claiming as a refund on Line 2 of Part I. To request a refund of the penalty you paid on the early withdrawal from your Roth IRA, you will need to complete Form 5329 and include it with your tax return. If you have any further questions, please don't hesitate to ask. I hope this information helps you determine if you are eligible for a refund on the penalty you paid for your early withdrawal from your Roth IRA. Additionally, you must file Form 8606 with your tax return for the year in which you made the contribution in order to establish your basis in the account. It's important to note that you can only claim a refund of the penalty if you did not take a deduction for the contributions you made to your Roth IRA in the year they were made. This is the amount that you may be able to claim as a refund on your tax return.Ĭomplete your tax return, including Form 5329 to claim the refund of the penalty, and submit it to the IRS. Once you have determined the taxable portion of your early distribution, you can calculate the amount of penalty that is attributable to that portion by multiplying it by 10%. This will give you the amount of the distribution that is not subject to tax or penalty. This will involve dividing the total amount of your non-deductible contributions by the total value of your Roth IRA at the time of the distribution, and then multiplying that percentage by the amount of the distribution. ![]() You can find this information on your prior year tax returns or in your personal records.Ĭomplete Part III of Form 8606 to calculate the taxable portion of your early distribution. Obtain a copy of your Form 1099-R, which should show the amount of the early distribution from your Roth IRA.ĭetermine the amount of non-deductible contributions you have made to your Roth IRA over the years. Here are the steps you can take to determine if you're eligible for a refund using Form 8606: However, if you made contributions to your Roth IRA that were not deductible (meaning you didn't get a tax deduction for them), you may be able to use Form 8606 to calculate the amount of the penalty that is attributable to those contributions, and therefore eligible for a refund. ![]() The exceptions include things like disability, first-time homebuyer expenses, or certain medical expenses.Īssuming that you do not qualify for one of these exceptions, you likely owe the penalty on the early withdrawal. Yes, I can help you with your question about Form 8606 and getting a refund on the penalty you paid for an early withdrawal from your Roth IRA.įirstly, it's important to note that the IRS imposes a penalty of 10% on early withdrawals from Roth IRAs, unless you meet one of the exceptions to the penalty. ![]()
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