In 2020 I contributed 7000 to my Roth. I was not aware that the limit was for both the Roth and Regular IRA.
Not only did I contribute extra to the IRA, but ended up contributing an additional 11,955 into my regular IRA. I ddecided to roll the 11,955 + 8702.61(existing IRA value) + 4,627.69 in growth totaling 25,285 into my Roth. I just got the tax info details and questions below
2020 Form 1099-R
- 1 Gross distribution $25,286.30
- 2a Taxable amount $25,286.30
- 2b Taxable amount not determined (X)
Now to the questions:
1. Will rolling the IRA to the ROTH satisfy the removal of excess money as I have to pay taxes on the rollover?
2. If the rollover does not qualify, would removing the 11,955 plus the 4,627.69 in growth in the roth satisfy this requirement?
I'm guessing that the rollover would be enough since I will be paying taxes at my normal tax bracket, but would like to verify the info above before tax submission this year. I read that its better to remove excess to avoid paying 6% excise tax each year.
