@Opus 17
Thank you again for your detailed response, but it turns there's a further complication. Please bear with me.
I called my broker yesterday and it turns out that I made an excess contribution of $3000 in 2024 as well... From what I've read in the forum so far, I think I need to do the following.
1. Remove the$6000 excess contribution I made in 2021 without earnings. File amended tax returns for 2021-2024 and pay the 6% penalty ($360 each year).
2. Remove the $3000 excess contribution that I made in 2024, with earnings, before Oct. 15, 2025 (the extended deadline). That way, I can avoid the penalty for the $3000 contribution made in 2024 (but not the $6000 contribution made in 2021, since it has long passed the deadline).
My questions are:
1. I filed the 2024 tax return by April 15, 2025, but didn't request for an extension. Can I still avoid the penalty if I remove the excess contributions before Oct. 15, 2025?
2. The earnings on the $3000 (2024 excess contribution) will be taxable. I will need to add the earnings to my 2024 AGI on form 1040-X. Am I understanding this correctly?
3. When amending the 2024 return, what would be the amount for total excess contribution? Is it $6000 or $9000? This is assuming I withdraw the $3000 contribution I made in 2024 prior to Oct 15, 2025.
4. When amending the tax returns for 2021-2023, do I just send form 5329 and 1040-X, and the payment? I saw in some other posts that 1040 Schedule 2 is also required.
5. When amending the 2024 return, do I need to include form 1099-R, in addition to form 5329, 1040-X, and the payment? I read online that I can manually create 1099-R and ignore it (at least as far as the 2024 amended return goes) when the financial institution sends me the actual form in early 2026.
6. How about the 2025 return, then? What do I need to look out for?
Thanks again for your patience!
