somehow I missed this one.
For 2023
"On your 2023 return you will have to edit that you didn't withdraw the excess contribution by the due date and TurboTax will calculate the 6% penalty. You have to pay the 6% penalty on the contribution since you didn't remove the earnings. You can only avoid the 6% penalty if you withdraw the excess contribution plus earnings."
are you saying I have to pay 6% on the 7500 and the earnings?! omigod! that wasnt even my mistake. thats a lot of money. The excess contribution was withdrawn right away; it was by the due date. I put it in on February 2024 and withdrawn soon after, before 4-15-2024. The earnings were withdrawn by me before 4-15-25. I did withdraw both, just one was by the due date and the other after. That is terrible. can you explain further? is that state tax 6% or just fed tax? since this was custodian's fault do I have recourse? a way to file a complaint??
also re 2024 return- the excess earnings are taken out. Is it necessary to contribute to 2025 by due date ( today) or can I do it later in 2025 so that it counts as applying the distribution. I did not request an extension ( sadly) - I know I could have done it then. I prefer not to do it at all and do 1 of the other things you suggested, esp since I have to work a few hrs in retirement to be eligible for it. But crucial question - do I have to make the contribution today? thanks so much. I should have extended- I am already amending. I think I was so tired not sleeping that I made that mistake. and with Direct pay it's not even necessary to request the extension for uS.
