Excess contribution Roth IRA

tj118 — Wed, 11 Feb 2026 05:36:42 GMT

I see that I am one of many with questions about excess contributions to Roth IRA. I have been following along on these forums and it has helped greatly with the advice given, but now I have run into a new pickle that I haven't seen addressed yet (or maybe I missed it).

I contributed $6,500 to my Roth IRA in December 2023. While preparing my taxes in February 2024, TT calculated that I made an excess contribution of $410 based on my AGI. I contacted Fidelity to get the amount withdrawn, along with earnings of $38, which was calculated with the help of a Fidelity rep. I understand that if I do not want to file an amended return and because I have not filed yet, I can report the earnings now by creating my own 1099-R (since it won't be issued until 2025). As such, on the 1099-R in TT, I filled out Box 1 Gross Distribution with $448 (the $410 returned back as my excess contribution + $38 earnings), Box 2a Taxable Amount as $38 (for earnings only) and Box 7, codes J and P.

My problem now is that TT has factored in the total $448 as an increase to my AGI, and now when I run through the screens again, it's now saying my excess contribution for the year is $430. So now there is a difference between what I withdrew from my original excess contribution and what TT is calculating as my excess contribution of $20 ($410 versus $430). This seems like a circular loop because if I realized way back from the outset what this all would entail, I really should have withdrawn more than the original excess contribution to account for the bump in income the earnings would cause.

I hope this makes sense, but I am wondering how to account for this. I prefer to not have to make another withdrawal, but will if I have to. I am just wondering if others have come across this situation and if so what the next correct steps would be, or if I am missing something entirely.

Thanks!

Re: Excess contribution Roth IRA

DanaB27 — Wed, 27 Mar 2024 11:04:44 GMT

Yes, when you are in the phaseout range for Roth IRA contributions then including the earnings from a withdrawn excess contribution can create a new excess contribution. Therefore, it is better to withdraw some extra to avoid the loop.

Yes, if you want to avoid the 6% penalty then you would have to withdrawn the new excess contribution plus some extra because the earnings will increase your MAGI again.

Please see What happens if I made an excess Roth IRA contribution for additional options.

Re: Excess contribution Roth IRA

wongjw1 — Sat, 06 Apr 2024 00:23:36 GMT

Thanks @DanaB27 - this helps a lot!

topic Re: Excess contribution Roth IRA in Retirement tax questions

Excess contribution Roth IRA

Re: Excess contribution Roth IRA

Re: Excess contribution Roth IRA