Excess IRA and roth IRA withdrawl

Forum|Forum|10 months ago
August 7, 2025
1 reply
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I contributed to a roth in 2024 in error and to an IRA early in 2025. I found out I made a mistake after my 2025 contribution and I did not qualify to make that contribution as I only have unearned income ( capital gains ) for both years. I was penalized for the 2024 roth error and I paid it and it's all over with. I'm going to withdraw the excess in 2025 because I could not in 2024. This way they won't keep penalizing me every year it correct ?

Also, the amount I contributed ( $7000 ) , to regular IRA early this year, I withdrew it after a few months . Will I have to pay the 10% penalty for withdrawing ? How about the taxes ? Do I get the 7K added to my income and then take a 7K ira deduction to cancel out that portion of the taxes? Or.... do I screwed and just have it added to my income and no deduction ? Sorry my question is so complicated.

Thanks

Not A Product Question

AmeliesUncle

Level 15

Correct, if you "remove excess contributions", there won't be the 6% penalty for an overcontribution.

If you "remove excess contributions", the amount of the original contribution will not be taxed or penalized.

If that contribution had earned anything, those earnings are subject to tax and usually a 10% penalty. But only on the earnings, not on the amount of the original contribution.

soccerfan1357Author

Level 2

Thank you. The excess amount I removed did earn a few hundred dollars in interest which was also removed along with original excess contribution. So I'll have to pay a penalty and taxes on those few hundred dollars I earned. No problem better then paying it on 7K.

Thank you !