I discovered that I made excess Roth IRA contributions over the past 3 tax years (without receiving any notification for such):
2021: $4,020 excess
2022: $7,000 excess
2023: $7,500 excess
I understand that the 2023 contribution can be withdrawn without penalty, and the earnings taxed on NIA, net income attributable (gains in 2023 based on the over-contributed amount as a % of the account). The first two years' contributions are penalized at 6% of the excess per year. No distributions have been made from the account so far.
If I withdraw the total excess contributions, $18,520, plus the NIA earnings (?), prior to filing this year, what would be the best process in TurboTax to do this? Also,
- Are the "excess" earnings in 2021-2022 also taxable, or does the 6% penalty cover that?
- Should the earnings for any of the 3 years be withdrawn?
I've read that the IRA custodian can issue a 1099-R for the distributions. Any insight on this would be much appreciated... Thanks.
