Withdrawals of contributions by due date.

[mgc6288]

Thank you for all of these responses.  After just speaking with Vanguard, they said that I needed to decide if this withdrawal is an Excess Contribution Removal or a Distribution along with what code for the 1099R.

Going by your discussion above, it sounds like an Excess Contribution Removal but the code I would not know.  

From reading your points above, it sounds like the Roth IRA withdrawal before due date doesn't have a penalty just taxes on the earnings in which I need to figure out where on the 1040 that amount will go.

Also, I'm surprised as I cannot find a concurrence or a rebuttal to your comment that a 401k withdrawal before due date will trigger a 10% penalty on the contribution and earnings.  Ouch.  I'm just attempting to pull out the $3500 that I put in during the 2023 tax year.  It sounds like even a day after contribution that once it is in there, leave it there.  Moving forward, I'll probably hold off on contributing into my 401k until the last few months of the tax season and instead focus on maxing out my IRA first.  You're pretty certain that in this scenario I'll be penalized 10%, correct?  If so, then I'll just leave the 401k alone.

[dmertz]

Section 401(k)(B)(2) of the tax code prohibits distributions of elective deferrals except under certain circumstances, so a 401(k) plan that allows a properly made elective deferral to be distributed except under the conditions permitted risks disqualification.

[mgc6288]

This keeps getting more and more interesting.  I'm dropping the 401k removal, I believe you are correct on this.  

As for the Roth IRA same year withdrawal, reading IRS Pub 590b where on page 31 it states, "Withdrawals of contributions by due date. If you withdraw contributions (including any net earnings on the contributions) by the due date of your return for the year in which you made the contribution, the contributions are treated as if you never made them. If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. The withdrawal of contributions is tax free, but you must include the earnings on the contributions in income for the year in which you made the contributions."

Vanguard suggested that the 2023 contribution made in July is taxable in 2023 but the 2023 contributions made in February 2024 will be taxable on the 2024 tax form, not in 2023.  Is this accurate information, as the part in bold above suggests all of it is in 2023 as made I made the contributions for the 2023 year.  Thank you.

[fanfare]

You have to find out how to fill out the request form or forms when you made contributions at different times

the earnings are calculated for the time period the contribution was in there.

OR, Vanguard computers will note the two contribution dates, and handle it.

It's all reportable on 2023 tax return, since it is currently before the tax return due date.

The Vanguard rep may just be confused, as was Fidelity rep.