Hi Folks,
My question is about how the IRS will treat just a regular "same-year" withdrawal compared to a "same-year" excess contribution withdrawal from a Traditional IRA. My contributions are non-deductible.
Quick Background: I wanted to withdraw $1,000 from my existing Traditional IRA. But, out of a variety of confusions, I filled-out, signed, and submitted a "Withdrawal of Excess Contributions" form for $1,000 to T. Rowe Price. T. Rowe Price is currently processing the form, and I can't cancel this transaction. I filled out the form in March 2024 for withdrawal of excess contributions for the 2023 tax year ($6,500 contribution was made in 2023 calendar year). I am not anywhere near 59.5 years old.
What the heck do I do at this point? I a concerned that the 1099-R info that T. Rowe Price sends to the IRS in early 2025 will show "withdrawal of excess contributions" as the reason, then the IRS will notice that I only made $6,500 contribution in 2023, and flag this as a problem. I understand from online searches that withdrawal of excess contributions does not incur the 10% penalty, whereas just a regular withdrawal does. I also understand that I have to pay taxes on earning either way. What should I do to relay to the IRS that this was an error, and that I am happy to pay the 10% penalty. How do I actually do all that?
Thank you for help with this.
