At what point is the 6% penalty for the 2018 Roth assessed by the IRS? As a reminder, we aren’t eligible for 2018 or 2019 Roth’s. Our 2018 Roth was past the deadline to convert it and so the only option was to remove the excess. However, we had time for the 2019 Roth, so our financial advisor is working on taking the 2019 Roth and recharacterizing it and then converting it back into a Roth via the back door method.
My financial advisor has already “removed the excess” for 2018, just this week, 2/23/2020. I understand that I won’t get 1099-Rs until 2020 for the 2018 Roth excess removal and the 2019 Roth conversion.
I am not understanding how I will know the exact amount of the 6% penalty and when and how I should pay it to the IRS before the 12/31/2020 deadline so I can prevent a year 3 of penalties for the 2018 Roth. I understand I already owe 6% penalties for the 2018 Roth for year 2018 and 2019.
