Thank you for the quick response. I have a few clarification questions to make sure I understand. I will also mention that our 2023 excess Roth contribution right now is only $130 resulting in $8 excise tax. I just want to clean this up as easily as possible.
If we file our taxes today or tomorrow showing the 2023 excess Roth contribution and pay the 6% excise tax, we can still request another withdrawal of 2023 excess Roth contributions plus earnings before October 15, 2024 and file an amended 2023 return, correct? If so, would there be any interest or penalties associated with filing the amended return since we will likely have to pay a small amount of tax due to the earnings increasing our MAGI, even if our initially filed tax return resulted in a significant refund?
Let's say we leave the 2023 excess contribution in the Roth and pay the 6% excise tax on our 2023 taxes. In late 2024, we determine that we cannot use/absorb the 2023 excess contribution in 2024. Are you saying that we could request, in December 2024, a regular distribution of the 2023 excess contributions ($130) and leave the associated earnings in the Roth without any interest or penalty? If that is the case, it sounds like it makes the most sense to leave the $130 excess contribution in the Roth and just take a $130 regular distribution, without earnings, in December 2023. Am I understanding this correctly?
A related question as we are trying to determine if we should request a refund of 2024 YTD Roth contributions now or wait until later in the year. I am concerned that if we wait until later in the year that we will end up with a year of earnings to report on our 2024 tax return. We have already made $1,998 in 2024 Roth contributions to my husband's Roth. I have run some preliminary estimates and suspect we will have excess contributions again in 2024 when adding the 2023 excess contributions ($130) and the 2024 contributions ($1,998) together. We have stopped making any additional 2024 contributions. In December 2024, if it still looks like we will have excess contributions, will the 2023 excess be a regular distribution ($130 - leaving earnings in the Roth with no tax or penalties)? And what about the 2024 contributions - would we make a request for refund of 2024 contributions with or without earnings? If with earnings, I think it might make sense to make a refund request for the 2024 contributions now rather than waiting since we will be taxed on nearly one year of earnings. Is my understanding accurate?
Sorry for the lengthy follow-up. I appreciate your insights.
