@macuser_22
First off thank you so much for the reply to my question as well as the others you have answered. I went through the continue option like you mentioned but never saw the follow-up question that said anything like "contributions not previously withdrawn. "
This is series of questions I saw:
- Have you ever taken a disaster distribution before 2021? - No
- Owned Any Roth IRA for Five Years (me)? - Yes
- Owned Any Roth IRA for Five Years? (wife) - Yes
- Were Any Roth IRAs Open (Was the Roth IRA open on December 31, 2021)? - Yes
- Withdraw from Steven's Roth IRA Before 2021? - No
- Enter Prior Year Roth IRA Contributions (Confirm net regular contributions prior to 2021 that remain in the Roth IRA) - $6,000. Was not exactly sure to put here. I did contribute 6,000 in 2020 but removed it in December of 2021 as it was an excess contribution.
- Any Roth IRA Conversions? - No
- Enter Excess Contributions - It automatically had the correct amount of 10,720
- Tell Us the Years (select any of the following years that you converted a traditional IRA to a Roth IRA) - None
- Adjust Roth IRA Due to Divorce? - No
Then it went to another set of questions:
Let's see if we can reduce your early withdrawal penalty
- Did you use your IRA to pay for any of these expenses? - None of the options applied to me.
- We Were Unable to Lower Your Tax Bill - It said: Based on your entries so far, your extra tax bill is: Me $472, Wife $239 , or 10% of the money you took out. This number may change as you add more info to your return.
I also went through this with a live expert and they didn't really have anything to add. So its still not clear to me why its showing an additional tax burden for the removal of the excess contributions. Any help is appreciated here.
Thanks!
Steve
