Hi, I would really appreciate any help with understanding the tax implications of reversal of an excess contribution to a Roth IRA, before the year was over.
- In February 2022, I contributed ~$4.5k to my Roth and invested the funds.
- In December 2022, I realized my AGI was higher than expected, and corrected the over-contribution before the year was over. There was a loss on the investments and so ~$3.9k was returned to me to reverse the contribution.
- I am younger than 59.5
Do I need to file Form 5329 / am I subject to the 10% early withdrawal penalty?
I believe when I was initially inputting the info into TurboTax, it told me that I currently had a penalty because I made an excess contribution to my Roth. I believe I then entered that I withdrew $4.5k of contributions before the due date of my return (I cannot figure out how to access this area again) and there were no more questions. Is it right that I entered $4.5k? I don't believe it is prompting me to fill out Form 5329. Since I corrected the mistake before the year was up, are there any penalties I am subject to or other actions I need to take?
Thanks so much!
