@mastersj575
return of excess contribution:
2024 before tax filing date including extension: positive earnings allocable to the excess are included in income on 1040 Line 4b for the year of the contribution. negative earnings are ignored; in any case, for purposes of basis, consider the original contribution amount as returned.
["Include the earnings in income for the year in which you made the contributions, not the year in
which you withdraw them."]
You must have a) filed by tax day, or b) requested an extension of time to file by tax day to take advantage of the Oct 15 deadline.
Consult your custodian to obtain the correct removal form for :excess plus earnings".
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You can't resolve the excess prior to the tax return due date without the custodian's help. your action generates a 1099-R and will be a problem next year if you do it yourself.
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2023 after tax due date including extensions: you distribute the excess amount being carried forward on 5329,
(or offset it with currently allowed contribution) .
Amended return(s) will be needed supplying that Form 5329 since there is a 6% penalty per year on accreting excess contributions .
Earnings stay in the Roth account.
Consult your custodian to obtain the correct removal form for each case.
