I filed my 2019 taxes on April 7, 2020 using TurboTax. After filing, I thought I could make a $5000 contribution to my Roth IRA for the 2019 tax year. I contributed to my Vanguard Roth IRA account on April 7, 2020 and selected the funds go to the 2019 tax year.
When doing my taxes this year, I realized I had incorrectly calculated my MAGI and wasn't actually supposed to contribute to my Roth IRA for 2019. On April 5, 2021, I removed my 2019 contribution out of my Roth IRA account. I have already filed my taxes for 2020, and I have made $0 in Roth IRA contributions for 2020 (ineligible).
Am I supposed to file an amendment for both my 2019 and 2020 taxes? And what penalties do I have to pay? Since I made the actual 2019 contribution in 2020 and have no contributions for 2020, do I have to pay any penalties at all?
Yes, you will have to amend you 2019 and 2020 tax return to include the 6% penalty on excess contribution on Form 5329 for 2019 and 2020 because you hadn't withdrawn the excess by December 31, 2020.
Please see How to amend (change or correct) a return you already filed for instructions.
On your 2019 return you will enter your contribution under the IRA contribution section and TurboTax will calculate the penalty.
On your 2020 return you will go to the IRA contribution section and continue through the questions until you get the Excess Contribution from prior years screen and enter the 2019 excess contribution. TurboTax will calculate the 6% penalty on Form 5329.
I have a similar situation, but am getting a different answer from Fidelity where the account is held. I made contributions of $1,485 in 2019 to a traditional IRA. In Feb 2020 I opened a Roth IRA and contributed $7,000 for tax year 2019 (I am over 50) and $7,00 for tax year 2020, not realizing that I was only allowed to contribute $5,515 for 2019 to the Roth since I had already contributed $1,485 to the traditional IRA. Unfortunately, I did not realize the error when filing my 2019 taxes and did not withdraw the excess before the 2019 filing deadline, including extensions, which would have been 10/15/20. I plan to withdraw the $1,485 excess before the 2020 filing deadline of 5/17/21 and my understanding from everything I have read is that I would owe the 6% penalty on the $1,485 for 2019 & 2020 and my withdrawal would NOT have to include earnings since I am past the corrective distribution deadline. However, Fidelity is telling me that the earning will be withdrawn because the actual contribution was not made until Feb 2020 (despite the fact that it was designated for tax year 2019). They are also telling me I will not owe the 6% excise because withdrawing the contribution before the 2020 filing deadline makes it as if the contribution was never made. I think they are wrong since in May 2020 they issued me a Form 5498 showing $7,000 in contributions and I don't think they plan to amend that form. Is there any authoritative guidance out there for correcting excess contributions made in one year for a prior year and not corrected before the filing deadline?
You are correct you will owe a 6% tax for 2019 since you did not remove the excess contribution made for 2019 by the due date of your 2019 tax return. You will also owe a penalty for 2020 since you did not remove the excess by December 31, 2020.
Since you are withdrawing the excess contribution for 2019 after the due date of the 2019 return you can request a regular distribution from your Roth IRA (if you made contributions to both traditional and Roth, then the excess contribution is deemed to have happened in the Roth).
You only have to withdraw the earnings as well if you withdraw the contribution before or on the due date to avoid the 6% penalty. (Publication 590-A page 42)
Please see this discussion from use dmertz for additional information.