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2018: I had an excess contribution = $X to my Roth IRA.

  • The excess contribution was made in 2018, not between January and April in 2019.
  • I'm younger than the Roth IRA withdrawal age.

2019: I am trying to make sure it's properly taken care of in my tax return.

  • Is the complete procedure for the next year as simple as contributing $(Roth IRA Limit - X)?
    • By following this, can you confirm I don't need to pay a 6% tax again?
  • Do earnings on the excess contribution (during the year of the excess contribution), matter?
  • Are there any forms necessary to indicate that the excess contribution was taken into account during the following year?

Full Scenario

2018

I contributed $250 excess to my Roth IRA. I chose to take the option of applying excess to a future year, and paid the 6% excise tax of $250 * 0.06 = $15.

https://www.hrblock.com/tax-center/income/retirement-income/excess-ira-contributions/

You can also address the excess by using it toward the next year’s contribution. By doing so, you will avoid the penalty once the excess is treated as an allowable contribution. This treatment is automatic, meaning you do not need to make any special elections to carry forward the excess.

Also here: https://retirementdictionary.com/tutorials/rothiraexcesscontr

If the excess is not removed by the deadline, it is considered a contribution for the following year. However, unless John is eligible for a contribution for that year and the amount does not exceed his contribution limit, it creates an excess for that year. John will continue to pay the 6% excise tax, until the excess is used up for a future year, or removed from the Roth IRA.

2019

The Roth IRA limit is $6,000. So I contributed $(Roth IRA Limit - X) = $6,000 - $250 = $5,750.

Did I handle the situation properly?


Related Links

Applying Roth IRA excess to next year

This question is extreme, as it was a double contribution. My amount is much smaller, so I thought things might be different.

As we all know, dealing with excess Roth IRA contributions can be a pain. I have searched the internet, and am having a tough time finding an answer to my questions. If this is a duplicate question, or is answered elsewhere, I will gladly read articles. Even a pointer in the right direction is helpful. Thank you in advance.

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