I just realized that in I contributed $6,500 to my Roth IRA and $3,000 to my traditional IRA in the 2023 tax year. I am now trying to fix this and would like some help making sure I am doing this correctly.
Even if I contributed to the Roth IRA in June 2023 and the traditional IRA in April 2024 (towards the 2023 tax year), I am supposed to remove the$3,000 from my Roth IRA according to the IRS rules?
Step I am taking:
1. It is an untimely excess contribution so I request a distribution of the $3,000 from my Roth IRA which will trigger a 1099-r with code J for the 2026 tax year.
2. I file a form 5329 for tax year 2023, 2024, and 2025. Can this be a standalone form mailed in or do I need to amend the tax returns?
3. The 5329 form will require a tax penalty of 6% each tax year so I pay the IRS $180 for 2023, $180 for 2024, and $180 for 2025
4. I expect a 1099-r with code J for 2026 tax year and once I report this form on my 2026 tax return everything is resolved.
Are these steps correct or am I missing anything?
And also any earning from the excess contributions are irrelevant in that I can just leave it in the Roth IRA and don’t need to calculate or report it anywhere because it was an untimely excess contribution, is that right?
