In calendar year 2024 I was not aware of the income limits for making a deductible IRA contribution. I contributed $6,500 to an IRA in March of 2024 to be applied to the previous year 2023 before filing taxes in April 2024 thinking it would be deductible. I then filed taxes and unknowingly had the contribution categorized as non-deductible since I was over the income limit for it to be deductible. Fast forward to December 2024 and I am just now finding out that the $6,500 was non-deductible. I have filed for a return of excess contribution from Fidelity. Here are my questions:
1) Was this return of excess contribution even allowed since I did not take the deduction when filing taxes and nothing was technically done wrong when taxes were filed? I would still like to remove the IRA contribution that way I could potentially do a back-door roth in the future.
2) Assuming the return of excess is allowed, how do I pay the 6% penalty? Do I report the excess contribution return when filing my 2024 taxes since the return of excess contribution took place in tax year 2024, or do I have to file an amended return for tax year 2023 since that is when the contribution was made?
3) Is there anything I'm missing in this scenario for what forms I'll have to file and when?
Thanks!
