topic Re: Excess Roth contributions in Retirement tax questions

Excess Roth contributions

Lynnruns — Tue, 10 Feb 2026 08:56:04 GMT

I made excess contributions to my 2023 Roth IRA. I asked my bank to recharacterize the excess to apply them to 2024. I have not filed 2023 taxes yet. This request should save me from incurring any penalties. My bank says they are unable to do this as they cannot code the co tributes ax 2024 because they were made in 2023. They said I have to do it with the IRS and may have a penalty. Everything I have read says that I can do this. Am I mistaken in thinking that the bank has to take an action to correct t the excess?

Re: Excess Roth contributions

fanfare — Wed, 31 Jan 2024 21:05:39 GMT

you can't recharacterize to a different year.

you can ask the custodian to " remove excess plus earnings" and return that to you.

Do it before the due date of your tax return April 18th.

@Lynnruns

Re: Excess Roth contributions

Lynnruns — Wed, 31 Jan 2024 21:41:19 GMT

Hi. Everything that I have read says you can do exactly that, including the bank that won’t do it for me. I think characterize might be the wrong term. This is from Fidelity:

3. Apply contributions to the next year

If you meet the income limit for the type of retirement account you’re contributing to, you could also apply your excess contributions to the next year, which means they’ll count toward the following year’s contribution limit. Before considering this correction method, first make sure to verify that the carried over excess will be eligible within next year’s limits. And, again, reach out to a tax professional if you have any questions.

It looks like the recharacterization terminology refers to moving it to a traditional IRA, which I don’t think I can do as I hit the limit in my employer-based 401k.

I don’t want to withdraw the excess because would have to sell the shares to go that. How do I apply it to 2024, instead?

Re: Excess Roth contributions

DaveF1006 — Thu, 01 Feb 2024 16:31:41 GMT

You can apply the excess amount to the following year and then reducing next years contribution by the excess amount carried forward. The problem is however you will charged a 6% penalty each year if this isn't corrected now. My suggestion is to sell those shares of stock to avoid this 6% penalty every year if not corrected.,