I have been reading lots of discussions on this forum and trying to find the correct solution to solve my excess Roth IRA problem.
Here is the story: I made a $6,000 Roth IRA contribution in 2019. When I filed tax return in July 2020, I realized that I was not eligible to make the contribution for 2019 so I made a request to withdraw the amount from my account and indicated that I would withdraw the excess before deadline in TT. However, when I was preparing for 2020 tax return in February 2021, I just realized that the request was not processed by my bank for some reason. So I had to made a normal distribution to withdraw the $6,000 contribution and $1,693 earnings (I have leaned that withdrawing earnings was a mistake) in March 2021.
Based on my research, I think what I need to do now to report the excess contribution and the correction I did would be:
1. Amend 2019 tax return to report excess contribution of $6,000 and pay the 6% penalty.
2. Enter a Form 1099-R with code J P into 2020 tax return so I don't have to amend the 2020 return later.
Is this solution correct? And since I have withdrawn the excess contribution in February 2021, do I still have to pay 6% penalty for 2020? Thank you in advance!
