@MH251 wrote:
Will you please provide details on how to leave it in the IRA because the earnings are more than the penalty.
In that case, you leave the excess contribution in the account and pay the 6% penalty. Then you have some options in 2025. If you will be eligible for Roth contributions, don't make any. When you file your 2025 return, you can apply the 2024 excess against your 2025 contribution limit. That will zero out the 6% penalty and allow you to leave the contributions and earnings in the account. Or, if you already made a 2025 contribution, then you take a regular withdrawal of the amount of 2024 excess. Because withdrawals of contributions are tax-free, this should be a tax-free withdrawal unless you have previously made large withdrawals that exceed your contributions. You don't have to remove the excess earnings, because that procedure doesn't apply here. You just take out the excess amount so that it doesn't continue to earn.
Either way, the net result is that you withdraw the excess contribution, or don't make a 2025 contribution, both of which reduce your future earnings more or less the same as if you had removed the excess using the standard procedure, but you leave the earnings in the account.
