1: 2017 money-- I can be penalized 6% for this. I can't change it anymore because the deadline was October 16. I can leave it and hope that I don't get flagged/audited. I don't know exactly how I would be able to pay the penalty ahead of time. (Hey IRS--- here's my money....) Anything that can be done or just leave it as is?
Sounds like you owe the 6% on this and you know it. This tax is computed on
Form 5329. The right thing to do in this situation is probably file an amended tax return for 2017 with this form included. You will likely owe a bit of interest and/or late fees on the amount you should have paid already.
Note that you will continue owing 6% every year until you correct the excess contribution. The two options for correcting it are to either remove the money that was contributed above the limit, or to contribute that much less than the limit this year.
2: The 2018 already contributed money ($3500) -- I was offered the option of taking it out and putting it towards my car loan (approximately $13000 left at 4.57% interest, paying $1000/month towards it already). OR I can do a backdoor Roth under my husbands name. My understanding is that it would go to a non-deductible IRA and then transfer to a Roth. I'm told there is a minimum of $5000 to do this so I would have to dip into my savings account to make up the different- not a problem. What is the best route to go? Is there another route?
I'm confused. You said you were filing separately for 2017 only, so you should be able to make 2018 contributions, right? Although if you are, you might find it most straightforward to simply withdraw this year's contribution you made so far and let this year's limit cancel out last year's excess contribution.
3: Future contributions of money -- $350 from now on. I initially decided to divert this to my retirement account through work. The benefit being that it would lower my income and help my student loan payments. I was told by my employer today that I will NEVER be able to change the 6% I contribute to that plan, but they offer a "457 deferred compensation plan" through John Hancock as an alternative. Would this be a good idea to do? Should I just have it be deferred to my husband's retirement account even though he's seeking new employment opportunities? Or is there another options I'm not aware of?
A 457 plan can be a great option for an early retiree because there is no 10% early withdrawal tax. If the fees in the plan are at all reasonable, this is definitely something to consider.
Regardless, get out of Edward Jones ASAP. They steal your money through unreasonable fees. Move your accounts to a low-cost provider such as Vanguard, Fidelity, or Schwab.