DanaB27
Expert Alumni

Retirement tax questions

Yes, you will have the 6% penalty on the 2021 and 2022 tax returns (for the 2021 excess contribution) since it wasn’t removed until 2023. 

 

You will only use the 2021 excess contribution amount as the prior year's excess contribution on your 2022 tax return ($7,000 for you and $7,000 for your spouse).

 

Yes, pulling the fund from your Roth will be a withdrawal. Please make sure that for the 2022 excess contribution, you request the withdrawal of the excess contribution plus earnings to get the correct Form 1099-R issued. The earnings will be taxable.

 

And make sure to request a regular distribution of $7,000 each for the 2021 excess to get the correct Form 1099-R since you are over 59 1/2 it will be either code T or Q.

 

Yes, if you have enough taxable compensation then you can put the 2022 excess in a traditional IRA. You would request a recharacterization instead of withdrawing the 2022 excess.

 

@gjgogol 

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