If you leave the ineligible contribution in the Roth IRA, it will be subject to a 6% penalty tax on your tax return this year, plus a 6% penalty for every future year that the excess remains in the account.
You have until the filing deadline (April 15) to remove the excess plus any earnings it has generated. If you remove the excess contribution, it will be treated on your tax return as if you never made it, and so it won’t be subjected to any penalties. If you earned anything from that cash, even a small amount of interest, it will be considered taxable income as of the date it is withdrawn (2023 or 2024) and subject to the 10% penalty for early withdrawal from an IRA.
You could also re-characterize the contribution as a contribution to a traditional IRA, or you could withdraw the $6500 and then make a contribution of up to $6500 to a traditional IRA. Because of your income, the contribution to the traditional IRA would not be tax deductible. However, depending on your other retirement account situations, you may be able to do a “back door“ Roth IRA conversion. Let us know if you want us to provide more details about that. (The most important factor is whether or not you already have a traditional pre-tax IRA funded with tax deductible contributions.)
