Turns out I'm ok, and not having to pay any penalty, it just takes a few more forms. I was doing Turbotax online, but unfortunately online doesn't give you access to forms....SOOO downloaded it this year (with a USAA discount!) I can fill out the extra forms and get everything squared away, noting that I made the contributions in 2012 then closed the account in the same year, and I have the statements to back it up.

Here's what I followed, per the link I posted above:

They will issue a 1099-R form and you will report the distribution on Form 8606, page 2, part III

This can get a little confusing because of the way the numbers travel through the forms but bear with me:

The 1099-R form will report the total amount distributed in box 1. They will also check off the box in 2b indicating "taxable amount not determined" and use code J to identify it as a premature Roth distribution with no known exception. It is up to you to report the proper amount on your tax return. Enter the amount on box 1 on Form 1040 line 15a (gross distribution). Note that only the amount on line 15b (calculated later - keep reading on) is the amount you pay taxes on.

Carry the amount from box 1 (Form 1099) to Form 8606 line 19. Enter zero on line 20 (unless you are using it for your first home) and enter the difference between lines 19 and 20 on line 21. Now, enter your total Roth contributions over the years (aka the basis) on line 22. Subtract line 22 from line 21 and enter the result on line 23 (do not enter less than zero). If you have a basis in Roth IRA amounts converted from Traditional IRAs enter that basis on line 24. Subtract line 24 from line 23 (again, not less than zero) and enter on line 25.

The number on line 25 is the taxable amount. This carries over to Form 1040 line 15b (taxable portion of distribution). You would also report this amount on Form 5329 if subject to the 10% penalty.

Here is an example:

You contributed $12,000 to your Roth IRA over the years and it now has a balance of $15,000 through dividends and capital gains. You withdraw $10,000 in 2007:

$10,000 Form 1099-R Box 1 (Code J)

$10,000 Form 8606 Line 19

$ 0 Form 8606 Line 20

$10,000 Form 8606 Line 21

$15,000 Form 8606 Line 22

$ 0 Form 8606 Line 23 (can not be negative)

$ 0 Form 8606 Line 24

$ 0 Form 8606 Line 25 (None of the distribution is taxable)

$10,000 Form 1040 Line 15a (gross distribution)

$ 0 Form 1040 Line 15b (taxable distribution)

Your remaining basis in the Roth IRA contributions is $2,000.

If your contributions were only $8,000 and you withdrew $10,000 you would report the $8,000 on line 22, and $2,000 on lines 23 and 25. The $2,000 carries over to line 15b on Form 1040 and to Form 5329 Part I.