@camel207 wrote:
I read some articles if we do not take action to withdraw excess after 10/15 in the following year, when we remove the excess later, the excess will be considered the income and we are due for double taxation. I did not see this portion being mentioned. Could you please help clarify that ?
From IRS : Unless timely distributed, excess deferrals are (1) included in a participant’s taxable income for the year contributed, and (2) taxed a second time when the deferrals are ultimately distributed from the plan.
IRAs and qualified workplace plans (like 401(k)s) are covered by different sections of the tax code and some rules and regulations are very different, even though the accounts have the same basic purpose. A Roth IRA is not the same as a designated Roth option with a workplace plan.
Make sure you understand what kind of account you are dealing with before you go looking for online information.
The question you are responding to was about a Roth IRA. Your comments are more closely applicable to a Roth option workplace plan.
