Thanks, @macuser_22.
I stand corrected and truly appreciate you taking the time to let me know.
I will work with Fidelity to get the excess amount withdrawn ASAP (say it is taken care by Aug 2020). Then I am assuming they will then issue a 1099-R (two of them one for the amount and the second one for the gain/loss).
Am I interpreting it right that I have to now add the excess amount as you mention in my 2019 tax return and ALSO also pay tax again next year tax return (as the amount will be withdrawn in 2020)? [Ignore the gain/loss for a moment].
Say the excess amount is $10,000 and I pay 20% taxes now, which is $2000 (to make the math easier). When I withdraw and Fidelity issues the 1099-R, I will have to pay another $2000? Plus factor in any gains/losses.
Did I get that right? What if I don't do anything now and take care of it next year to avoid double taxation - maybe pay a small(er) penalty?
Thanks!
