Hi, thanks for the explanation. I am in the same excess ROTH contribution boat.
* I did undo my 2020 ROTH excess contribution via ETrade in 2021, before 5/17/2021
* I followed option 2 instruction to create a 1099-R in 2020 Tax Return.
* TurboTax did tell me that the gain associated with the excess contribution is 10%, $99 in my case (my associated gain withdrawn is $990).
All is well except I don't understand why my total tax due went up $343 instead of $99 (from owning $2088 to owning $2431)? The excess contribution should not be taxed as I understand, but it seems to be taxed?
[I am not 59 1/2 yet; withdrew $3200 as excess ROTH contribution and ETrade calculated the associate earning. So my box1 = $4190.73 and box2 = $990.73]
Thanks in advance.
