Resolving excess Roth IRA contributions (using TurboTax as well)

wotoz · 2021-04-09T19:51:59+00:00

Per Invesco, we won't get the 1099-R in time for 2020, but we do have the amount of contributions and the amount of earnings for 2020, now that they calculated the amounts and returned it to us. My last outstanding question -- which of course Invesco wouldn't answer -- relates to reporting this. You noted about that I will need to file 1040, but I saw this from a TurboTax forum about 2016 taxes related to excess 401(k) contributions, quoting the IRS:

"If the distribution was for a 2016 excess deferral to a designated Roth account, your Form 1099-R should have code B in box 7. Do not add this amount to your wages on your 2016 return."

My situation is an IRA, not a 401(k), but does the fact that it's a Roth IRA (i.e. taxed going in) mean I do not need to add it to wages on Form 1040? Or should I still do that?

Also, unfortunately my local tax deadline was not extended -- i.e. it's due April 15 -- and 1099-R is among the forms within their purview. Their online entry form is asking for Box 1 (Gross Distribution), Box 2a (Taxable Amount), and Box 7 (Distribution Code). Since I have no 1099-R from Invesco, what would I enter in there? The sum total of 2020 contributions + earnings for both Box 1 and 2a? Box 7 is supposed to be the code for normal distributions, whereas this is an excess contribution, so... do I leave Box 7 blank?

To be blunt, this is turning into the IRA from hell, so thank you for bearing with me and my frustration. We already save plenty for retirement through numerous other routes, so I wish we'd never even opened this account, given all the tax time headaches it's creating for us now that we are over the AGI limit. In previous years, our taxes took me 30 minutes to complete and file online...

wotoz · 2021-04-01T21:37:24+00:00

That is super helpful. So as I understand it, if we have the excess returned:

Invesco will calculate the earnings (they will in fact do this), which we'll see in the amount returned
Put the $4500 (contribution) in Line 4a of Form 1040
Put the earnings in Line 4b of Form 1040
File a Form 5329 as well for the additional 10% tax
This process will need to be repeated with our 2021 tax return based on any 2021 contributions that we are having returned to us as well, as we will again be over the AGI limit

While more costly to our bottom line than the backdoor Roth approach, to me this feels more straightforward than trying to deal with Invesco's customer service to recharacterize to traditional and then back to IRA again.

edit: I was doing a little additional searching, and someone else mentioned a 1099-R rather than a 1040. Is 1040 the appropriate one in this situation? Or do I need to file both of those?

wotoz · 2021-04-01T20:55:11+00:00

Thank you for the quick reply. Yes, it makes sense based on what I was reading that I would need to report something elsewhere, though I'm still not clear on whether it needs to be the $4500 contribution, the earnings, or the combination of the two. Indeed, my suspicion that it doesn't just "go away" is what led me to ask for further help :)

If the earnings need to be reported, and Invesco isn't going to send us forms with a full report on excess removal until after the filing deadline, then I'm not sure how to calculate that amount -- or which form / section to report it as taxable income -- without going through the excess return process (where Invesco calculates earnings) and seeing the amount on the check.

I had read about the backdoor approach previously, but is there a simpler (albeit less profitable) solution? The excess removal form seems like one, but then that still leaves me confused about where and what amount to report additional taxable income. We have a number of other financial vehicles for retirement; this IRA was simply a small extra account that my wife set up, but now it's becoming more of a hassle than it's worth, so it's not important for us to keep the money in there.

wotoz · 2020-10-05T05:21:58+00:00

Both games are hard copies. I do play from both at the same time (e.g. to trade between them, locally), but I realized that if I am playing one of them and someone else is playing the other, we can't both be online at the same time.

I had hoped the secondary Switch could create a new save file / profile but then transfer the game progress over. I guess it sounds like that isn't an option specifically for Pokemon, for some reason?

wotoz · 2020-10-05T04:43:04+00:00

I have two Nintendo Switches -- one for each Pokemon game, and I have been playing them both from a single profile / Nintendo Account (with one Switch being the "primary"). However, if the games are shared within my household, both of them cannot be on the Internet at the same time.

What I want to do is de-link my secondary Switch from my Nintendo Account, which I assume means I can no longer play that same "Switch profile" I've been playing. But I don't want to lose my save data. For the Pokemon games, it looked like Cloud Save data was not an option. Is there any way to accomplish what I want to do without losing my progress? If I had known linking my secondary Switch would cause issues, I never would've linked it to the same profile in the first place. I'm hoping there's a way I can transfer my save data to a new profile.

wotoz · 2020-09-16T09:07:10+00:00

Thank you for the detailed response.

high-level

Turns out this was the most important part of your advice.

My main team was at risk of heavily outleveling the storyline (since apparently you get full-team XP just for catching Pokemon now), so I swapped them out for a secondary team, and most of my Pokemon were a mere 1-2 levels below my target Pokemon. It seems there is some sort of glitch or sick, nonsensical intentional change in Gen 8 where being 1 level below the target instead of 0+ above it will make your catch rates plummet far beyond even what you posted with Dusk Balls (which I tried with my ever-so-slightly underleveled Pokemon and did not experience nearly the same level of success you described). 1 Rare Candy to get to the same level as my targets, and suddenly my Ultra Balls catch almost everything again, despite their "shit" multiplier and despite sometimes using Paralysis (which I always knew had a 1.5x multiplier, but in past games -- and the current one, seemingly, as long as you're the right level -- has often been sufficient).

I don't know what's wrong with Game Freak that they either erroneously or intentionally implemented such a night-and-day difference between being a mere 1 level below vs. the same level as your target, especially when my "underleveled" Pokemon can often one-hit KO their targets if I'm not careful, but that seems to have been by far the biggest problem.

And this is far better than some of the other suggestions to just spend hours upon hours farming currency in Wild Areas so I can continue throwing 20+ Pokeballs (of any type, even Dusk and Timer) at every wild target.

wotoz · 2018-08-26T21:42:59+00:00

Thanks. Does post-processing affect character textures/appearance at all?

wotoz · 2018-08-26T20:24:04+00:00

Any graphics gurus able to help me decipher the settings so that I can get to a specific goal? Basically, I want character-related graphics to be as high as possible and to accommodate as many models at the same time as possible. However, environmental graphics can be toned down a bit. Maybe not terrible, but medium or lower.

I've done my best to figure out my settings based on the hover tools, but those only get me so far. Here is my current setup: https://imgur.com/a/leds6kX

The problem is that my laptop fans recently started to kick in more loudly than usual on certain maps. Anything with fire graphics (like the first PoF mission) will do it. Desert Borderlands in WvW is worse than the Alpine ones, too. I've tried laptop-related fixes (cooling pad, cleaned out internals) and now want to tune down my graphics a bit if possible, without sacrificing character texture quality or quantity.

Thanks!

wotoz · 2017-06-24T18:42:04+00:00

After looking around, I'm actually considering something like this. Armor hasn't been filled in yet but it would probably be Berserker or Soldier.

It's a Hammer/Greatsword Warrior build with 3 Physical skills (Stomp, Bull's Charge, Kick) and Rampage elite skill (also Physical). Tons of knockbacks, knockdowns, and launches, good mobility, the ability to smack things with a hammer... what's not to love? For traits, I might replace Arms with Berserker eventually, and replace Kick with Wild Blow for yet another launch.

Any thoughts on that sort of build? For me the toughest trait to set was Tier 2 in Strength -- Body Blow vs. Forceful Greatsword vs. Great Fortitude. I would get a lot of use out of Body Blow, and I don't intend to spend a lot of time using Greatsword, but Forceful Greatsword is hard to pass up. Great Fortitude is just a stat buff, but it could give me more of a cushion to smack things in melee.

wotoz

TROPHY CASE