Code J means that is is Roth.
If you are over 59 1/2 then on the "Lets see if we can lower your tax bill" enter the box 2a amount in the "Another Reason" box to eliminate the 10% early withdrawal penalty on the earnings.
The "loophole" fanfare referred to is a provision of tax law that that requires that a 6% penalty be paid on the excess if not withdrawn plus the earnings by the due date if the return.
Sometimes the earnings will be more than the 6% penalty so it pays to NOT get a return plus earnings before the filing date and withdraw the excess after the fining date as a normal distribution and then pay the 6% penalty. Then the earnings stay in the IRA since the 6% penalty was paid.
Your $7,000 excess would have a $420 penalty but the $8,111 earnings would be untouched.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
