I'm still a little confused after looking through similar questions on the forum and talking to my financial advisor on how to rectify excessive ROTH IRA contribution for 2018 and 2019. I just noticed having excessive ROTH IRA contribution due to income limits now (MAR 2020).
For 2019 contribution, since I haven't filed 2019 returns yet, I'm working with the banking institute to remove/withdraw $6000 in contribution and any associated earnings. I can then file 1099R using excess contribution for box 1, earnings (calculated from banking institute) for box 2, and code JP box 7, corrected? Do I do the same if it generated a loss?
For 2018 contribution, can I carry this over to ROTH IRA contribution for 2020 if I'm eligible for contribution in this? If so, what do I need to do? If not, then I need to remove/withdraw the 2018 excess contribution and associated earnings correct? What do I need to do/file with my 2019 return to avoid 6% penalty in 2019 and onward?
For the excess 2018 contribution, was 6% tax already penalized and taken out once I filed 2018 Returns for 2018? Or should I be expecting a debt from IRS sometimes down the road for both penalty for year 2018 and 2019?
