Want to know if there is any way I can avoid the 6% penalty that will apparently be applied for the excess Roth IRA contribution. Was working in Turbotax Premier and came to the Roth IRA contribution section prompting me that I should consider contributing in 2020 to save on taxes. I moved online to my brokerage account and transferred $6000 from my taxable account into my Roth IRA account and categorized it as a 2020 tax year contribution. Returned back onto Turbotax and then it tells me that I am not eligible to contribute anything since I am over the income limit this year. Frantic, go back to my brokerage online and transfer $6000 out of my Roth IRA account through a corrective distribution and back into my taxable account. I am now asking my brokerage to make certain it will be classified as a 'corrective' distribution (versus a normal distribution which I am not eligible for without penalty). Now Turbotax has displayed an additional $360 tax due for this “less than one hour” mistake. Is there anyway around this? Seems a tad harsh for an honest mistake like this that was quickly reversed.
