DanaB27
Expert Alumni

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Yes, when you are in the phaseout range for Roth IRA contributions then including the earnings from a withdrawn excess contribution can create a new excess contribution.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Yes, if you want to avoid the 6% penalty then you would have to withdrawn the new excess contribution plus some extra because the earnings will increase your MAGI again.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.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"