I contributed $3500 to Roth IRA in 2021 and now realize that I don't qualify because of total income exceeding the threshold. So, I withdrew the money [contribution($3500) + Earning ($130)] and put it in a brokerage account. I understand that I have to pay taxes on the earnings and have to report this to IRS. The challenge is that Vanguard told me that since I did the "distribution" (withdrawing) in 2022 - I'll get the 1099-R for 2022 in 2023 but the "contribution" was done in 2021 - I need to report this in my taxes now.
Has anyone been in this situation? How do I do this?
1) Where is the option to fill the 5329 form in turbotax?
2) Do I pay any penalty on the earnings if I have already taken it out? If yes - where do I report that?
