@macuser_22
I’ve had some time to review your feedback and have some follow up questions. Any insight would be appreciated.
1. On the excess contribution form I completed, I actually claimed that the full $6k from 2019 & $6k from 2020 as excess due to misinterpreting how I calculated my MAGI (I was leaving 401k contributions in). I presume this will show up on my 1099-R because that’s the info I gave to the brokerage account. Should I have this info updated with them so that the 1099-R info actually reflects what my allowed vs excess contribution amounts were for 2019 & 2020? Or, will the TurboTax software know to adjust what I owe based on my MAGI coupled with the questions they ask and how I answer?
2. For 2019 contribution: outside of the 6% penalty, will the earnings from the allowed + excess contributions will be added to my AGI for 2021 and taxed then because that's when the excess form was completed / withdraw occurred?
3. For 2020: Since the excess contribution form was initiated before the 2020 tax deadline in Jan 2021, I’ll add the excess contribution earnings to my AGI on my 2020 amended return (since I already filed). What about the earnings from the allowed contribution that weren’t considered excess? Will those earnings be added to my AGI in the 2021 tax year since that’s when the withdraw happened?
4. Will the 10% penalty be paid on my 2021 tax return since that’s the year when the funds were withdrawn?
5. Does it matter that both the allowed + excess contributions along with their earnings were both withdrawn via the same excess contribution form?
