@Opus 17 @dmertz
Hi both,
It took some time clarifying with Schwab, but I was able to do what I was planning. Your guys' earlier responses definitely were correct, it just took me awhile to fully understand it.
What I did:
2019: remove $6K excess, ~$1K earnings, total $7K. I will amend my 2019 taxes and pay the 6% penalty of $360 on my excess contribution. I will pay the penalty of $1K on my 2021.
2020: recharacterized $6K excess, ~$1K earnings, total $7K. My question here, when I amend 2020, do I need to report or get taxed on the excess in the $1K? Is that going to affect any forms for 2020 or 2021?
2021: recharacterized $6K excess, -$0.5K loss, total $5.5K. For 2021 taxes, I believe I just need to mention that this value was re-characterized.
The Schwab person told me that when I get my 1099 from them for 2021, it will have all the transactions (from 2019-2021). I'm hoping it is easy (?) to adjust the Schwab import or note in TurboTax that majority of the money is post-tax dollars, and 2020/2021 have been rolled into a traditional IRA.
Regarding paying the 6% on 2019. I know I have to pay it for 2019. Do I need to pay it also for 2020? Or can I say that because we are working on tax year 2020 right now, that it will be fixed by then? (Just trying to pay as little penalty as possible)
Appreciate the help.
