My wife and I each have an excess contribution of $7,000 for our Roth accounts in tax year 2020. This was due to an increase in income but we should be below the Roth contribution limit in 2021. Can we pay the 6% penalty ($420) on our 2020 tax return and if we make no contribution to our Roth in tax year 2021 does that eliminate the excess going forward? In that way we are effectively reducing this years contribution (2021) by the excess amount from 2020. I think form 5329 can handle the tax penalty, form 5498 would still show $7000 in 2020, and if I understand things correctly I won't need a revised 1099.
