My wife and I accidentally contributed $7000 to her Roth IRA account in 2024 directly rather than using the "backdoor roth" method, and her AGI is above the allowed amount for direct Roth IRA contribution. I am now trying to fix the issue. Since it's now 2026 and I've missed the extended filing deadline for 2024, I assume we will have to withdraw the contribution and pay the penalty.
Can someone confirm if these steps are correct?
- Withdraw the original amount contribution amount of $7000 (assume I will get a 1099R form next year showing this as an early distribution and have to pay the 10% penalty next year as well)
- Fill out 5329 form for 6% penalty with my 2025 return. I have done this using Turbotax for the 2025 return, can someone confirm this looks correct:
- File 5329 form for 6% penalty for 2024 amended return.
- Amend 2024 tax return 8606 form? When we filed the 2024 return, we thought we had contributed to a traditional IRA, not Roth IRA, so we filed 8606 for my wife with the $7000 as a nondeductible traditional IRA contribution.
Please let me know if above is correct or if I'm missing anything. Thank you!
