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Werewolfdad

https://www.whitecoatinvestor.com/fix-backdoor-roth-ira-screw-ups/ You don't withdraw, you recharacterize. Don't fck it up, read the link


mistermister111

Makes sense, thanks for the link. My initial thought was since the Roth is down for the year, by withdrawing I think I could recontribute the full contribution amount to the Traditional IRA (start fresh with $6000). But that's definitely not worth the headache given a recharacterization is much simpler


harrisc42

That is not how it works. Withdraws are actions completely independent of un-allowed contributions. Withdrawing the money does not excuse or correct the original contribution that was made in error.


mistermister111

I see. Is investopedia just plain incorrect then? “Withdraw the excess contribution and earnings: In general, you can avoid the 6% penalty if you withdraw the extra contribution and any earnings before your tax deadline. You must declare the earnings as income on your taxes. Also, you may owe a 10% tax for early withdrawal on the earnings if you're younger than 59½“ https://www.investopedia.com/articles/retirement/04/042804.asp#toc-how-to-fix-an-excess-ira-contribution


nothlit

The portion you quoted is correct in context. Just taking an ordinary withdrawal does not undo a contribution. You can undo (remove) a contribution by specifically withdrawing an amount equal to the contribution and any net earnings. When you do this you need to inform the IRA provider that's what you're doing, so they code it correctly on the 1099-R and don't just treat it as a normal withdrawal.


nkyguy1988

Contact your custodian of the account. Tell them you over contributed and they will walk you through the process. Every major broker will do the formal calculations for you since they do it on the daily. Then do what they say.