Hi all,
This year I started and contributed to a ROTH IRA (2023). However, now that we’re nearing the end of the year I realized I exceeded the income limits. Meaning I shouldn’t have contributed anything to it. I contributed 6,500 and now obviously that has grown - let’s say to 7,000. I therefore sold all the assets and plan to withdraw the 6,500 since the 6,500 was the contribution that shouldn’t have occurred and those are typically tax/penalty free. With the 500 left over, if I withdraw it within the same year (2023) will fidelity correctly characterize the money? Or is there something specific I need to do to correctly report the gains? Will they be characterized as capital gains OR ROTH IRA income? Am I better off just leaving it in the ROTH IRA and pay 6% (I will likely exceed the limits next year as well). I just want to be sure I’m not going to be taxed on the 6,500 AGAIN as this was post-tax money. Thanks.
