#1) You must file a 5329 for for each year starting with a 2014 5329 part IV that would have the 2014 excess and the 6% penalty on that excess. For 2015 file a 2015 5329 with both the 2014 excess and 2015 excess so the 6% penalty will be for both. Likewise for each year 2017-2019 (the 2019 would have the total of 2019 excess and all prior years).
#2) You can amend, but the penalty will not affect anything else on the tax return so the 5329 can be mailed by itself.
#3) Just mail the 2016 5329
#4) The time limit is to amend for an additional refund. There is no statute of limitations of you owe additional tax.
#5) If you removed all the excess in 2020 then you will receive one of two 2020 1099-R forms in 2021. The prior years excess should be a normal distribution with a code J in box 7 or J1 if under age 59 1/2. The 2019 excess removed in 2020 should have a code JP in box 7 indicating a "return of contribution" and not as a normal distribution.
#6 Because you must pay the 6% for 2014-2018 then the earnings for those years are allowed to remain in the IRA and need not be removed or taxed. The financial institution should calculate and return the 2019 excess plus the earnings attributed to the 2019 excess and report the earnings in box 2a on the 2020 1099-R with the code JP - those earnings will be taxable income.
When entering the 1099-R's the interview will ask for prior years contributions not previously removed - include the total of ALL contributions including the excess contribution so the returned contributions will not be taxable income - only the 2019 earnings will be taxable.
**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.**
