@HarleyandJen
By the way, if you have a "tax guy" who made a mistake, they should fix it for free.
So let me walk you through this in order.
2019
You have an excess contribution of $7000. You need to file an amended return, BUT you can file form 5329 alone, you don't need to file an entire amended return. You can do this yourself, it does not need to be down in Turbotax. Here is the 2019 form and instructions.
https://www.irs.gov/pub/irs-prior/f5329--2019.pdf
https://www.irs.gov/pub/irs-prior/i5329--2019.pdf
Make sure your wife signs the form (since it was her single return), and check the "amended" box at the top right. The excess contribution is reported in part IV (part 4) and she will owe $420 as a penalty. She can mail a check with the form, or she can make a payment online at www.irs.gov/payments. Be sure she selects "2019" as the reason for the payment. The IRS will probably send a bill later for interest and late fees. She can apply for a waiver of the penalty here, but the interest can't be waived.
https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-first-time-penal...
2020
You need to file a full amended return for 2020, probably using Turbotax. You can complete a "withdrawal of excess contributions" even though you did not have an extension, by writing "Filed pursuant to section 301.9100-2” at the top of your amended tax return. Here are the Turbotax instructions for amending.
https://ttlc.intuit.com/community/amending/help/how-do-i-amend-my-return/00/27439
When working on your amended 2020 return, you need to tell the program that your wife had a 2019 Roth excess contribution of $7000. You also need to report the 2020 Roth contribution and the withdrawal of $14,000 excess. This should result in having a form 5329 part 4 that shows you started the year with a $7000 excess balance but ended the year with no excess, so no more 6% penalty.
You will also report the $4000 of earnings as 2020 income due to withdrawal of an excess contribution, but you do not report the withdrawal of the $14,000 of contributions. (This is a tricky point--because the withdrawals occurred in 2021, the withdrawals should be 2021 income, but because part of the withdrawal was earnings from excess, that counts as 2020 income even though it occurred in 2021.) The $4000 earnings will be subject to income tax plus a 10% penalty in part 1 of form 5329. The regular income tax owed on the earnings will be calculated on the main tax form.
The amended return is a new form 1040, plus any other forms that changed, plus a 1040-X cover page. Print all the required pages, sign them, write "Filed pursuant to section 301.9100-2” at the top of page one, and mail it all in. You can include a check, or make an online payment of the amount owed, be sure to select "2020" as the reason. You may get a bill for interest and late fees.
2021
For your 2021 return, report the 1099-Rs. The 1099-R for $7000 should be non-taxable since it only includes contributions and withdrawals of contributions are never taxable. The 1099-R for $11,000 will be non-taxable, since $7000 was contributions and the other $4000 was already taxed on your 2020 return. So there should be no tax or penalties related to this situation.
The part I have not personally practiced is what exactly you will tell Turbotax on your 2021 return so it knows that the earnings included in the 1099-R were already taxed in 2020. If you can't figure it out, there are lots of people here who can walk you through that section of the program.
