@shugu88
return of excess contribution:
---The rules are different for a contribution for this tax filing year, and a contribution for earlier years.
In either case you must take out the excess contribution.
You didn't say what year.
Assuming you made a contribution for 2025 ...
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before tax filing date including extension: positive earnings allocable to the excess are distributed and included in income on 1040 Line 4b for the year of the contribution. negative earnings are ignored; in any case, for purposes of basis, consider the original contribution amount as returned.
["Include the earnings in income for the year in which you made the contributions, not the year in
which you withdraw them."]
You must have a) filed by tax day, or b) requested an extension of time to file by tax day to take advantage of the Oct 15 deadline.
positive earnings removed are no longer penalized 10% if you are under age 59 1/2. (eliminated in 2023)
Consult your custodian to obtain the correct removal form for "excess plus earnings".
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You can't resolve the excess contribution prior to the tax return due date without the custodian's help. your action generates a 1099-R and will be a problem next year if you do it yourself.
