Although my self-employed (I'm retired) income totaled $13,233 in 2014, when my and my wife's 2014 (trad) IRA contributions of $6500 ($13,000 total) were entered in Turbo Tax, only $12,421 was deductible, leaving an excess contribution of $579 for my wife. Form 5329 (with the 6% tax) and 8606 were filed in 2014.
In 2015 filing, on form 5329, her IRA (from beneficiary IRA, not her personal IRA) distributions of $3,433 were subtracted from her 2014 excess contribution of $579, it left a balance of "0" and no 6% tax was charged, and therefore no form 8606 was filed (there being no basis going forward).
I assume the 2015 form 5329 was incorrect and that we would have to remove or recharacterize the excess contribution from the same IRA into which she contributed (and not her beneficiary IRA).
Do we need to amend 2015 form 5329 filing and pay the annual 6%...each year, all the way to the current 2020 filing (and assign the $579 to a 2020 contribution)?
