I had posted this question on another website once before but probably was not specific enough. Situation: Husband and wife contributed $4000 "each" to a Roth for "2005 but because of income limitations they were only allowed to contribute $2000 each. Your response will be greatly appreciated as I have this work pending.
Questions:
1. Can I assume they must each withdraw $2000.00?
2. Does the earnings pertaining only to the $2000.00 also have to be withdrawn?
3. Is the excess contribution of $2000 each subject to 6% penalty and reported on form 5329? Seeing that it's a joint return, can I include all the withdrawal ($4000.) on one #5329?
4. How are the "earnings" reported? Create a form 1099 and amend the return for 2005 including a 10% penalty for early withdrawal?
5. Will there also be a charge for 2006?
Questions:
1. Can I assume they must each withdraw $2000.00?
2. Does the earnings pertaining only to the $2000.00 also have to be withdrawn?
3. Is the excess contribution of $2000 each subject to 6% penalty and reported on form 5329? Seeing that it's a joint return, can I include all the withdrawal ($4000.) on one #5329?
4. How are the "earnings" reported? Create a form 1099 and amend the return for 2005 including a 10% penalty for early withdrawal?
5. Will there also be a charge for 2006?
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