When I filed my 2023 tax, I made a full contribution to ROTH IRA of $6500. I didn't realize that it was $3690 over the limit for that year. My 2023 tax, has form 5329 indicating it, and I paid the 6% additional tax for that year.
I contacted Fidelity, and they said I have 2 options: withdraw the excess or apply the contribution to 2024.
Which is the better option? I'm leaning toward applying the excess to 2024 contribution. (I checked my income for 2024 and I confirmed that I can contribute up to $7000 this year)
Questions:
- What do I need to do to get my tax squared away? Do I need to file an amendment for 2023?
- I see form 5329 in my 2024 tax recognized the $3690 excess. Is that sufficient to correct the mistake? Do I need to pay additional tax & fees?
- This also means I can contribute additional $3310 for 2024, correct?
- I'm guessing Fidelity also need to do some paperwork to apply the contribution to this year?
