#1. If in the 2019 software yiu enter the entire contribution the TurboTax will calculate the excess and penalty on the 5329. Only the excess is subject to penalty. Because you owe the penalty the earnings do not need to be removed from the IRA - they stay in it. Only a "return of contributions" before the due date require earning to be removed. The 6% penalty allows the earning to stay in the IRA.
For 2020 if you removed the excess plus earnings (hopefully you removed a bit more) because the taxable earnings will add to your MAGI possibly making a new excess. When you are in the MAGI "phase out" range any increase in MAGI creates a new excess (round-robin) so some extra should be removed to allow for that to prevent a 2nd distribution.
**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.**
