Retirement tax questions

@jliangsh 

For 2021-2024 you pay the 6% penalty on the excess contributions only.  You do not have to account for the gains in the account (so if you got more than 6% return, you come out slightly ahead).

 

For 2025, if you did not withdraw yet, you only need to withdraw the $6000 of contributions.  You don't have to account for the increased value.  That procedure only applies when you withdraw the excess before April 15 of the year after you made the excess contribution.  At this point you just have to withdraw the $6000.

 

You will get a 1099-R in January 2026 reporting the withdrawal for 2025.  Enter it on your 2025 tax return.  Since it is a withdrawal from a Roth IRA, it will not be taxable unless you are withdrawing more than your original contributions (normal Roth IRA withdrawal rules).   As long as you have been using Turbotax and you import the 2024 return with form 5329, Turbotax will automatically create a form 5329 showing that the $6000 withdrawal is a withdrawal of the excess that has been in the account.  If you have not used Turbotax before, you still need form 5329, you will have to read the instructions and pay attention to questions like "did you have any excess contributions on your 2024 tax return".)