I realized a few days ago that I overcontributed to my Roth in 2012. I will comply with the law but would like to avoid the 6% excise tax. I'd appreciate any help.
Facts:
I made a $5K contribution to my Roth IRA in January 2012 for the 2012 tax year.
I filed my 2012 taxes in February 2013.
My MAGI was within the Roth IRA contribution income phaseout limits for my filing status.
I have completed the worksheet in Pub 590 and have discovered that my reduced Roth IRA contribution limit for 2012 is $4,170. I therefore have an excess contribution of $830 for 2012.
I made a $5K contribution to my Roth IRA in January 2013 for the 2013 tax year.
I read from Pub 590 here
http://www.irs.gov/publications/p590/ch02.html#en_US_2012_publink1000231012:
"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 For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. This treatment only applies if any earnings on the contributions are also withdrawn.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 2012 tax return without withdrawing a contribution that you made in 2012, you can still have the contribution returned to you within 6 months of the due date of your 2012 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.
Applying excess contributions. If contributions to your Roth IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year."
Question: Can I avoid paying the 6% excise tax if, based on the last sentence quoted above, I withdraw $830 plus associated earnings from my
2013 Roth IRA contribution? Or must I withdraw the $830 plus associated earnings from my
2012 Roth IRA contribution and file an amended return as described in the previous paragraph?
Thanks to anyone willing to read this and offer an opinion.