@DanaB27 OK the steps weren't exactly what you described but I think I am where I am supposed to be.
1. so to confirm, when it asks me if I contributed to a Roth IRA in 2022, I should say NO because I withdrew my 2022 excess contribution (made on Jan 14, 2022) on March 31. 2023, correct?
2. It also asks me for my traditional IRAs, which I have some but did not contribute to it in the last 20 years. should I identify that money as well so TT can track it? Or will it confuse me and TT?
3. At this point, does it matter if my contributions made 20 years ago were deductible vs. nondeductible? For those contributions made 20 years ago, I do not remember if they were deductible or not.
4. I also clicked on "learn more" link on one of the TT pages and it took me to an "on demand tax guidance" text box that stated the following...
If the excess contribution is not withdrawn by the date your tax return is due (including extensions), you will be subject to a 6% tax on the excess. This is calculated on Form 5329.
This penalty is cumulative and carries over each year until you correct it. If you withdraw the excess on or before the date your tax return is due, you pay no penalty as long as you took no deduction for the excess amount on your return.
Make sure you also withdraw the interest that's been earned on that excess amount as well. You must report any interest earned on the tax return for the year that the excess contribution was made. Unfortunately this interest may also be subject to the tax on early distributions.
Please note the sentences where it states, "This penalty is cumulative and carries over each year until you correct it. If you withdraw the excess on or before the date your tax return is due, you pay no penalty as long as you took no deduction for the excess amount on your return."...since it seems to tie the no penalty part to the cumulative penalty statement, doesn't this imply that for 2022 I do not owe a penalty on the excess 2021 excess contribution if I withdrew the 2021 excess money by April 18, 2023?
