Thanks a million. You save my life.
Still some follow up questions:
In my daughter's case: 2020, 2021, 2022, 2023 : each year $1000 Roth contribution.
We requested removal of all the excess contributions last week. I hope it will be done by April 15 2024.
1) Can we still keep the earning in the roth ira account? (I read another case from bogleheads.org) It is a little bit confusing.
2) I am clear on how to fill up the 5329 form for 2020, 2021 and 2022.
For year 2023 and 2024 5329 form, I am a little confused.
Since we removed the excess contribution before April 15 2024,
here are my calculations:
-----------------------------------------------------------------------------------------------------------------------------
5329 form for 2023.
line 18: 3000 ( those are carryover from 2020, 2021, 2022)
line 20: 1000 ( we contribute $1000 for 2023, but removed it in April 2024. A little bit confuse. )
line 21: 1000 (add line 19 and line 20)
line 22: 2000 ( line 18 minus line 21)
line 23: 1000 ( excess contribution for 2023)
line 24: 3000
line 25: 180 ( 6% x 3000 penalty)
-------------------------------------------------------------------------------------------------
Form 5329 (year 2024)
line 18: 3000 ( those are carryover from 2020, 2021, 2022)
line 20: 3000 ( removed it in April 2024. )
line 21: 3000 (add line 19 and line 20)
line 22: 0 ( line 18 minus line 21)
line 23: 0 ( excess contribution for 2024)
line 24: 0
line 25: 0 ( 6% x 3000 penalty)
-------------------------------------------------------------------------------------------------
