Retirement tax questions


@dmertz wrote:

As it stands, you've actually made a $26k regular contribution to the Roth IRA and Vanguard classifying it as a rollover is incorrect, based on incorrect information provided by you to Vanguard.  You'll need to get Vanguard to correct the classification of the deposit.  To avoid an excess contribution penalty, the correction would have to be made as an explicit return of contribution, not as an ordinary distribution.


Yes.  If it wasn't clear, when I suggested "I think you can contact the new Roth IRA, say "it was all a mistake", withdraw the mistaken contribution..." I meant use the special procedure for return of mistaken contribution, and not a regular withdrawal. 

 

As it stands, if you have not done the actual 401k to Roth transaction (which seems to be the case), then you first need to withdraw the mistaken contribution using the special procedure, then do a proper rollover from the 401k.  As @dmertz  notes, Vanguard has the "mistaken contribution" incorrectly coded as a rollover, so that probably needs to be corrected with them before you do the withdrawal.