How to report withdrawal of excess contribution to ROTH IRA?

[toplane81]

Background: In 2021, I contributed $6k to a ROTH IRA when I had no income. In 2022 (had sufficient income), I made a $4.5k ROTH IRA contribution and $1.5k Traditional IRA contribution. I converted the tIRA to a RIRA but mistakenly reported it as a $6k contribution to a ROTH IRA.

In 2024, I realized the excess contribution in 2021 and withdrew the full amount of $6k. I've went ahead and filed Form 5329 to report the excess contribution and 6% penalty for 2021 and 2022, and also amended 2022 return to correctly report the backdoor ROTH IRA contribution. In 2023 and 2024 I have done backdoor ROTH IRA contributions and conversions.

Question: My question for 2023 filing, how should I report the withdrawal of the $6k? Would I still need Form 5329 for 2023 since I did not withdraw the 2021 excess contribution amount of $6k until March 2024? How and when should I report the $6k withdrawal of the $6k contribution so I no longer have the 6% penalty?

[fanfare]

report 2023 Form 5329 the same as the previous year.

you still have an excess

Your withdrawal of $6,000 excess goes on your 2024 tax return. there will be no penalty.

@toplane81 

[toplane81]

@fanfare 

Would I report the $6k withdrawal on 2024 Form 5329 Line 20 (2024 distributions from your Roth IRAs)?

Would there be any need to report the withdrawal of excess contributions on Form 8606?

[fanfare]

You withdrew the amount that will show on your 2023 Form 5329 Part IV.

Report that on 2024 Form 5329 Line 20.

You don't use Form 8606 for this.

@toplane81