Thank you so much. Thanks to you both I think I am clear.
For 2024
- Remove the excess contribution and the earnings
- Report the earnings on (a fill in myself) 1099 R using codes J and P (I thought 8 and J so thanks for that note)
- Only "penalty" is paying taxes on earned income
- Include in 2024 taxes the overcontribution in 2023 to pay for overcontribution (for final year)
- Next year (2026) I will receive a 1099R for 2025 that I can disregard (J and P will be marked) for the 2024 earnings
For 2023
- File a 5329 paying 6% penalty for two years (2023 and 2024)
- Next year (2026) I will receive a 1099 R with code J marked
- File the 1099-R with my 2025 taxes and that will include any other fees/penalties from the 2023 over contribution and I am done
I think that's what I took from all this. Thank you so much!
