So you're saying that the distribution of $1900 from my Roth IRA should be an ordinary distribution and there should be no tax since those are after tax money that I have already contributed to my Roth IRA.
However since I've requested Vanguard to handle those money as an "excess contribution" for 2022, and considering that Vanguard wont make any mistake, I'm expecting an 1099-R with distribution code 1 (early distribution) or code 7 (normal distribution) and J (early distribution from Roth IRA).
According to IRS, if those $1900 are considered excess contributions in 2022, because they have earnings from 2022-2024, and because it goes beyond of 2024, according to IRS, I dont have to take out those earnings anymore (since the excess goes back beyond 2024) but instead I have to pay a penalty of 6% for the excess amount for each year the excess emaing in my Roth IRA ie from 2022-2024.
And indeed from what I see Vanguard only removed the $1900 from my Roth IRA without any earnings, which means that I have to pay this 6% penatly of this "excess" for each year from 2022-2024. But like I said this is NOT finally an excess contribution since I never exceeded the limit of $6000 for 2022, since I got confused with the Roth 401k and Roth IRA limits.
So my question is next year when received the 1099-R, how can I handle this to avoid any taxes or penalties of this $1900 amount from 2022?
