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Retirement tax questions
Yes, when you are in the phaseout range for Roth IRA contributions then including the earnings from a withdrawn excess contribution can create a new excess contribution. Therefore, it is better to withdraw some extra to avoid the loop.
Yes, if you want to avoid the 6% penalty then you would have to withdrawn the new excess contribution plus some extra because the earnings will increase your MAGI again.
Please see What happens if I made an excess Roth IRA contribution for additional options.
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March 27, 2024
4:04 AM