Hi RobertB4444,
Thank you so much for your reply!! Kindly see below for some clarifications:
1. The over contribution and earnings I take out, these won't be considered as early distribution (10% penalty)?
2. Over contribution + earnings would be what I need to report on 5329 (not just the excess portion), correct?
3. If I get the money distribute to me (e.g. check or electronic transfer to my account), how do I report the money was used for education expense to avoid the 6% excess fees?
4. When I withdraw the over contribution and earnings, I will withhold the federal and state taxes, so I won't need to worry about amending any tax return, correct? Would my 2021 tax return need to report the distribution (over contribution and earnings) in advance?
5. So if I file Form 5329, can I put both children's over contribution onto one form (e.g. excess $2000 on each, would report $4000 (+ earnings))? Or I will do each separately for both year 2019 and 2020 (total 4 forms to send)?
Really appreciate for your assistance!!
