dmertz
Level 15

Retirement tax questions

I corrected my previous post to reflect that your excess Roth IRA contribution is $5,030, not $5,070.

 

"I have a Roth IRA at a separate bank that has previous year converted money.  About $10k."

 

Then you'll have to take distributions totaling the entire $5,030.  This can be taken from your Roth IRAs in any combination because for this purpose all of your Roth IRAs are treated in aggregate as if they were one large Roth IRA.  It might be simplest to take the entire $5,030 from the larger Roth IRA as a single distribution, but that's up to you.

 

If you are not eligible to apply any of the $5,030 as a 2022 Roth IRA contribution, it's too late to avoid the $302 penalty for 2022 (in addition to the one for 2021) on the $5,030 excess.  To avoid that you would have needed to take the $5,030 regular distribution by December 31, 2022.  Taking that distribution in 2023 eliminates the excess in 2023 and avoids the penalty for 2023 and beyond.