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... is there something I'm missing?

I think so -- I think the penalty is 6%, not 2%, and it's not a one-time hit as you seem to think, but per calendar year until the excess contributions have been removed.

The best place for a definitive answer is TMF's Tax Strategies board. You can either post your question over there, or (even better, IMHO) browse thru past posts (search for words like "excess contribution") and see what previous posters have been told.

Don't expect a free lunch from the U.S. Congress, or the IRS, on this ticket!

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