My wife(age 58) and I(age 64) both have 529 accounts that we are the beneficiaries. We contributed $8,000 each to roth ira's earlier this year from the 529 plans. Since the funding I recieved a capital gain I did not anticipate which has pushed us over the income limit for contributing to roth ira's. I see how to correct overcontributions when the money is not from a 529 but cannot find instructions for our situation. T Rowe Price manages the 529 accounts and gave me no useful information. Do I remove the $8,000 and earnings from the roth accounts and return to the 529 plans to avoid taxes and penalties? How do I document this for the IRS? What forms need to be filled out for my annual tax filings? The 529 accounts have had funds for over 15 years, would these contributions cause that clock to restart for possible future roth contributions from them? Should I simply remove the $8,000 plus earnings and pay current taxes on earnings plus a 10% penalty for a non educational withdrawal from the 529- what IRS forms would I use?
I need some direction as to the best way to correct this.
Thank you
steve
