I made an excess Roth IRA contribution in 2022 due to lack of earned income. My contribution was of $2000, but I only had $1600 in earned income, so an excess of $400. I know my options are to apply the excess to next year, or remove the excess contribution after the tax deadline - for ease, I believe I would like to apply the excess to next years return; especially since I already filed and paid the 6% penalty for this 2022 Tax Filing year. My main question is what "apply the excess to next year" actually entails? I understand I can leave the excess contribution (of $400) in the Roth IRA and apply it to next year's contribution, but does that mean the $400 excess that I have contributed doesn't officially count for the 2022 year and would actually be going toward the 2023 year? So, for example, if I contributed $2000 for the 2023 year, would I actually write down $2400 contributed on my Tax filing? I'm just confused where this excess of $400 actually comes into play and how to move forward without facing another penalty for 2023. Appreciate the help, thank you all!
