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Retirement tax questions
return of excess contribution:
before tax due date including extensions: positive earnings allocable to the excess are taxable on the Line 4b for the year of the contribution. negative earnings are ignored; therefore, do report the entire requested amount as returned .
positive earnings removed are penalized 10% if you are under age 59 1/2. That's the only situation that would require Form 5329.
Since you had negative earnings. the amount going to 1040 Line 4b is zero.
‎April 13, 2023
7:42 PM