I recently discovered that I made excess Roth IRA contributions of $6,500 for 2023 and $6,210 for 2024. I contacted my broker today (before April 15, 2025) to remove the excess contributions for both years. I was informed that I will receive Form 1099-R in 2026 for the withdrawal.
Since I withdrew the 2024 excess contribution before April 15, 2025, I understand that I will not be subject to the 6% excise tax for that year. However, I will owe a 6% penalty on the excess 2023 contribution because it remained in the account beyond the 2023 tax filing deadline.
Additionally, when the broker processed the withdrawal, I incurred a loss of $278.55 on the 2024 excess contribution.
My Questions:
- How do I amend my tax filings using TurboTax? I submitted my 2024 Tax already.
- Do I need to amend both 2023 and 2024 tax returns using Form 1040-X and Form 5329, or do I only need to file Form 5329 only? A step-by-step guide for using TurboTax would be greatly appreciated.
- Should I wait until I receive Form 1099-R in 2026 to amend my 2023 and 2024 tax returns, or should I amend them as soon as possible?
- Will I owe interest or additional penalties if I wait?
- How many years of the 6% penalty do I owe on the 2023 excess contribution?
- Does the penalty amount depend on whether I amend my taxes before April 15, 2025, versus after receiving Form 1099-R in 2026? Will I have to pay interest if I choose to wait until 2026?
- Since I incurred a loss of $278.55 on the 2024 excess contribution, do I still owe the 10% early withdrawal penalty on earnings? Can the loss be deducted from my taxable income?
Than you very much for your help!
