Yes, if you have a lot of gains then it could better to pay the 6% penalty on your 2024 return instead of withdrawing the excess plus earnings since the earnings are taxable in the year you made the contribution.
If you do not remove the excess plus earnings before the extended due date then you have these options to avoid the 6% for 2025 :
- You could apply it as a 2025 Roth IRA contribution when you file your 2025 return if you are allowed to make Roth contribution for 2025
- You can take a regular distribution between October 16th and December 31, 2025 to remove the excess contribution without the earnings since it is after the due date of the 2024 return.
Just make sure you have the excess resolved with one of these options or you will have to pay the 6% penalty again for 2025.
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