While filing for 2025 taxes, I realized there is an excess contribution in Roth IRA for years 2025, 24, 23, 22, and 21. Somehow it was never flagged before until this year. Because there is not enough income, there were excess contribution (for all these years).
Steps we have taken so far:
1. Filed for extension for 2025 tax returns
2. Initiated the withdrawal of excess contribution as:
2a. For years 2021-2024, we are withdrawing Excess only
2b. For year 2025, we are withdrawing Excess + Earnings
I'm seeking clarification on next steps:
1. [Amendement] Do we need to amend each previous year (2021, 2022, 2023, 2024) tax return? There has no been no other changes in the returns.
2. [Form 5329] Or can we just submit standalone Form 5329 for each year 2021, 2022, 2023, 2024? Do we need to fill out Form 5329 for 2025? If so, do I file the Form 5329 form with the 2025 tax returns? Do I need to report the earning on my excess contribution for 2025 in 2025 tax returns or report it for 2026 tax returns?
3. [Penalty waiver] How do I apply to waive or reduce the penalty? Any experience?
4. [Tax professional] Should I hire a CPA to take care of this? Any idea of how much it would cost?
Could anyone please help me. Thank you in advance!!
