Greetings! I just found out doing my taxes that because my AGI is too high this year, all of my $7,000 Roth contribution is in excess. I know one option is to re-characterize the $7k and earnings into an IRA. Are there any other options?
1. Can I withdraw the excess contribution and put it into my son's 529 plan?
2. Can I withdraw the excess contribution without penalty and place into a checking or savings account? Then count the earnings on 1099-R?
3. Are there any other options? I have not filed yet.
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You can ask the IRA trustee for a "return of contributions" that will also return any earnings attributed to the excess. That will be reported on a 1099-R with a code PJ in box 2. Only the earnings in box 2a will be taxable. You can do whatever you want with the returned money.
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