Thanks again for the quick response. A couple of additional questions.
Are we allowed to request a refund of his 2024 excess Roth contributions plus earnings now (paying any required taxes on the earnings in 2024) and still leave the 2023 excess contribution in the Roth for possible use/absorption in 2024 and then just request a general distribution in late 2024 for the 2023 excess contribution, if we cannot absorb/use it? Or, do we have to make a decision about how to handle the 2023 excess contributions before making a refund request related to the 2024 contributions plus earnings? I am just wondering if there is some type of requirement in the tax code that a taxpayer has to make decisions about prior year excess contributions before requesting a refund of current year contributions plus earnings.
It seems unusual to me that the 2023 excess contribution has to be refunded with earnings (paying taxes on the earnings in 2023) if taken out of the Roth before filing the 2023 taxes, but in 2024, if we cannot use/absorb the 2023 excess, then we can take it out via a general distribution, leaving the earnings in the Roth, and not pay taxes on the distribution or earnings, if withdrawn before year-end 2024. So, it may have made better sense to leave the total 2023 excess contribution in the Roth and see if it could have been used/absorbed in 2024, and if not, then just do a general distribution, without earnings, before year-end 2024. Therefore, we would not have had withdraw earnings and pay tax on earnings related to the 2023 excess contributions. Am I understanding that correctly?
Thanks again. I have found your responses very helpful.
