Retirement tax questions

If you close your Roth account then please be aware you can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free.  But the earnings will be included in your taxable income  and you will have to pay a 10% early withdrawal penalty if you are under 59½.

You could also recharacterize the excess contribution as a traditional IRA and make it nondeductible to be able to convert it to the Roth IRA later. This way you avoid the 6% penalty. Also, there is no tax or penalty on the earnings since the earning will be simply switched into the recharacterized account. 

If you want to do this then you will have to make this request with your bank to recharacterize  your Roth contribution as a traditional IRA contribution.

If you choose to recharacterize the Roth contribution as a traditional IRA contribution then follow these steps to enter this on your amended 2020 return:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions”
3. Click on “Jump to IRA contributions"
4. Select “Roth IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Roth contribution amount 
7. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount (no earnings or losses)
8. TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized.
9. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes"