Both my wife and I had excess Roth IRA contributions for tax year 2022 as follows:
Excess contribution - Self: $7000
Excess contribution- Spouse: $4476
I removed the excess contributions for 2022 this year in April 2024. Per my broker, as it was past the tax deadline (including extension) of Oct 15, 2023, I just need to remove excess contribution and pay 6% penalty on excess before Oct 15, 2024, tax deadline, which I plan to do shortly.
Further for tax year 2023, I again had excess contribution of $7500 in my account and $207 for my wife's Roth IRA. which I removed before tax deadline (including extension) of Oct 15, 2024.
Now all the excesses having been removed both for 2022 and 2023, my following questions relate to how to report removals and any associated penalties.
Q.1 Do I have to file amended tax returns for 2022 or just paying penalty on forms 5329 for my wife and myself sufficient? It is being suggested by certain sources online that I have to file amended tax return for 2022 and forms 5329 even when nothing is to be amended on my return itself, which does not make whole lot of logic. So, if I submit forms for myself and my wife with penalties to IRS, would it be meet IRS requirements?
Q2. For 2023 removals, since excess removal is considered distribution in the year it is removed (2024 in this case) and would be reported on 1099X by my broker in 2025, do I need to do anything at this time (before Oct 15,2024 extended tax deadline) with respect to 2023 taxes, such as filing amended taxes for 2023 or form 5329 for 10% penalty of about $5 due to early disbursement from my wife's accounts as she is below 59 1/2?
Q3. Any guidance on leveraging my TurboTax tools to help me sort through this and file appropriate forms.
Q 4. Anything else that I may be missing?
