2020 Overcontribution

[Hieb2012]

I accidentally contributed too much to my 2020 IRA this year.

I contributed $7000 to a traditional IRA and $1000 to a Roth IRA.  My intent was to contribute $6000 to my traditional IRA but I lost track and contributed too much.  The Roth IRA was used in previous years but due to a jump in income in 2019, I wanted to reduce my tax liability as much as possible.

I've since purchased and sold several stocks and am now fully invested in stocks.

What do I need to do to rectify this situation?

I know that I must sell off at least $1000 worth of securities in each account, but how do I know if I owe interest, penalties, etc. and what do I do to withdraw?  I assume an excess contribution form?

Any help is appreciated. 

Thank you.

[macuser_22]

You have until the due date of your 2020 tax return (April 15, 2021) to request a "return of excess contribution" (NOT a regular distribution) from your IRA.   The IRA custodian must return the $1,000 excess plus any earnings attributed to the excess.     They will issue a 1099-R next January for you to report it on your 2020 tax return.   Only any earnings returned will be taxable/

[Hieb2012]

How do I know what excess earnings are attached to that original $1000?

[macuser_22]

The returned amount will be in box 1 on the 1099-R that you will receive ans the taxable earnings will be in box 2a.  Just enter the 1099-R into TurboTax and TurboTax will do the rest.

[Critter-3]

@Hieb2012 

How do I know what excess earnings are attached to that original $1000?

That is the broker's job ... they will put it on the 1099-R.