Message Font: Serif | Sans-Serif
 
No. of Recommendations: 2
So now I need to undo that to the tune of $1520.

Actually, it needs to be $1520 plus any earnings on the $1520. And then those earnings become taxable income to you in the year that the excess contribution was made.

My questions: Does it matter which of the two Roth IRA accounts I take this money from -- or must it be from the very account that sent me over the limit?

It doesn't matter, since IRA stands for "Individual Retirement Arrangement" and all IRA accounts of the same type for the same owner are considered part of the arrangement.

Does this have to be done by December 31? --or could be be done in early 2019, but before I file a tax return?

It could be done later - up to 6 months after the original due date of your 2018 return, if your return is filed timely. But doing it in 2018 would probably be simpler, because you need to count the earnings in 2018. Here are the rules on withdrawals of excess contributions from IRS Pub 590-A https://www.irs.gov/pub/irs-pdf/p590a.pdf

Withdrawal of excess contributions. For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. This treatment only applies if any earnings on the contributions are also withdrawn. The earnings are considered earned and received in the year the excess contribution was made. If you timely filed your 2017 tax return without withdrawing a contribution that you made in 2017, you can still have the contribution returned to you within 6 months of the due date of your 2017 tax return, excluding extensions. If you do, file an amended return with “Filed pursuant to section 301.9100-2” written at the top. Report any related earnings on the amended return and include an explanation of the withdrawal. Make any other necessary changes on the amended return.

AJ
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.