Roth Recharacterization Cluster

[Saschelk]

nm

[RobertB4444]

To start with, I highly recommend that you go see a tax professional to work on this.  Amending all of these returns properly is a time consuming and expensive process and a tax professional can help.  They can also negotiate a settlement with the IRS for what amounts to an error from six years ago.

I also think you should be discussing this issue with Fidelity.

If you insist on doing this yourself then you need to follow all the steps you laid out.  And TurboTax can only help you as far back as 2019.

@Saschelk 

[fanfare]

since it is long after the tax filing deadline, if you do decide to take out the amount of an excess contribution, you can leave the earnings in the Roth IRA

[fanfare]

you cannot do a rollover from tIRA to Roth IRA

you could report this as a conversion in 2017 and pay the 2017 tax.

how much are we talking about? more than the IRA contribution limit?

if you were eligible but did not make IRA contributions in those following years, that amount reduces the excess contribution year by year (after amending)

[Saschelk]

Appreciate the response, already in the works, just can’t get anyone good until after Corp filing deadline 🙄

[Saschelk]

RE: fanfare

[fanfare]

If you have a large amount of earnings attributable to the $5,500 excess contribution, say 30% or more, you may find it beneficial to leave the excess in and pay the 6% penalty. Then, after tax filing date including extensions when it's too late to request a return of excess contribution, but before the end of the calendar year, you can simply take a distribution of $5,500 (e.g. the original excess)  to prevent another 6% penalty for the tax year from being assessed. Resolving the excess allows you to end the penalties while leaving the earnings in the account.

you can also resolve by applying upcoming allowed contributions, but you said that path is not available to you

Most Roth holders don't understand this.

See Form 5329 Part IV

[Saschelk]

Appreciate the response.  I had been assuming that the earnings would also be subject to an annual 6% fee.  Are you certain that the 6% penalty is not assessed on the earnings after the original excess contribution is resolved?  I will research 5329 part iv; appreciate the information.