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April 4, 2025
Question

Excess Roth IRA in 2023

  • April 4, 2025
  • 1 reply
  • 0 views

I just realized I had an Excess Roth IRA in 2023. My 2023 tax return was prepared by a CPA instead of TT. It is the first time for me to use TT this year. I  wanted to move this amount to 2024 Roth IRA which is under my 2024 Roth IRA limit. I have not filed my 2024 return and not contributed Roth IRA for 2024 yet. 

 

By learning many posts, I understand I need to file an amendment 2023 by paying 6% tax on this excess.

 

Questions:

1. To carry this excess from 2023 to 2024, do I need to take actions with Merrill Edge? or I just fill in TT and report it in 2024 filing? 

2. For my 2024 filing, do I have to pay 6% tax? where to input? 

3. How shall I handle the earnings generated by this excess? 

4. 2023 amendment, can I do it by myself with TT or better to ask the CPA who prepared my 2023 to do so? 

5. Anything else do I have to take care before filing my 2024 return? i.e. 2023 amendment will be taken care later and I am not so familiar with its impact on 2024. 

 

I would like to invite @Dana17 to help me. Highly appreciated!

    1 reply

    fanfare
    Employee
    April 4, 2025

    " move this amount to 2024 Roth IRA which is under my 2024 Roth IRA limit."

     

    This is key, you do not move anything. you use your 2024 amount to offset the 2023 excess.

    You won't be able to make a 2024 Roth contribution.

    You can do this on you 2024 tax return with form 5329. That eliminsates the 2024 penalty.

    Earnings stay in the Roth IRA.

     

    amend 2023:  ask the CPA to do it and how much it will cost you.

     

    @LucyLiu5 

    fanfare
    Employee
    April 4, 2025

    If it costs too much you can do it yourself by generating one Form and one Schedule with the necessary corrections.

    You would mail those two pages with Form 1040-X and your payment.

    It's not rocket science.

     

    You need a copy or transcript of your original return.

     

    @LucyLiu5