Retirement tax questions

You will have to pay the 6% penalty for 2019, 2020, 2021, 2022, and 2023 unless you are able to apply the excess as a Roth IRA contribution in one of those years. For example, were you allowed to make Roth IRA contributions in 2020 and did not already contribute the full amount? If yes, then this would fix the excess contribution if not then you will have to pay the 6% penalty for 2020, 2021, 2022, and 2023.

If you were not able to apply the excess contribution to one of those years then you will have to request a regular distribution of $898.70 (no earnings or losses) to remove the excess contribution for 2024. The 2024 Form 1099-R will be entered on your 2024 tax return next year and remove the excess from your return.

You will have to amend your 2019 return to fill out Form 5329  Part IV to calculate the 6% penalty. 

On your 2020 amended Tax return follow these steps to calculate the 6% penalty or apply the excess to 2020 if allowed:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. On the "Do you have any Excess Roth Contributions" answer "Yes"
5. On the "Enter Excess Contributions" screen enter the total excess contribution s from line 24 of your 2019 Form 5329
6. On the "How Much Excess to 2020?" screen enter how much you want to apply to 2020.

If you are able to apply the excess to 2020 then you are done, if not then TurboTax will calculate the 6% penalty and you will have to amend your 2021 return and repeat the steps. If you cannot apply the excess to 2021 then TurboTax will calculate the 6% penalty and you will have to amend your 2022 return. Please see How do I amend my federal tax return for a prior year?

If you cannot apply the excess in 2022 then you will have to enter the excess contribution in your 2023 return:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. On the "Do you have any Excess Roth Contributions" answer "Yes"
5. On the "Enter Excess Contributions" screen enter the excess contribution from line 24 of your 2022 Form 5329
6. On the "How Much Excess to 2023?" screen enter how much you want to apply to 2023.