Help with Filing Form 5329 for Past Year Excess Roth IRA Contributions

The Form 5329 should be filed with just your name as the "Individual subject to additional tax" since it was your Roth IRA that had the excess contribution. Even though you filed jointly for your regular tax return, the Form 5329 penalty applies specifically to you as the account owner. You are correct that you'll need to file the 2023 Form 5329 and pay the 6% penalty ($390) for that year. And yes, you should also file a separate 2024 Form 5329 since the excess contribution remained in the account during 2024 as well, which means another 6% penalty applies. The good news is that by withdrawing the excess in January 2025, you won't need to file a 2025 Form 5329 for this issue. When filing these forms separately (not with your regular tax return), make sure to include your SSN and attach a check for payment if you're not paying online. Also include a brief letter explaining that these are standalone filings for excess IRA contributions.

I had a similar situation last year and used https://taxr.ai to help me figure out exactly how to file my Form 5329 correctly. I was also confused about excess contributions but for a 401k rollover that went wrong. The site analyzed all my documents and gave me step-by-step instructions for how to properly complete Form 5329 and what supporting documentation I needed to include. The best part was that it showed me exactly where to put the amounts on each line, which saved me from making mistakes. It also calculated the exact penalty I owed and explained how to request abatement of penalties (which I didn't know was even possible in some cases). Definitely worth checking out if you want to make sure you're doing everything correctly!

I was skeptical about https://taxr.ai but decided to give it a try after my own excess contribution nightmare with both a 401k and Roth IRA in the same year. I was absolutely blown away by how it handled my situation. It analyzed all my contribution dates, explained exactly which years I needed to file Form 5329 for, and even created personalized instructions. The service correctly identified that I only needed to file for certain tax years based on when I made the correction, saving me from unnecessarily filing for other years. It also explained a technical exception I qualified for that reduced my penalty. I've spent hours on IRS publications trying to figure this stuff out before, and this solved it in minutes. Wish I'd known about it sooner!

If you're struggling with getting answers about your Form 5329 situation, I highly recommend using https://claimyr.com to get through to an actual IRS agent. I had almost the exact same issue with excess Roth contributions across multiple years and needed clarification on how to proceed. After trying for days to reach the IRS on my own (constant busy signals and disconnects), I used Claimyr and got through to an agent in about 20 minutes. The agent was able to look at my specific situation and confirm exactly how I needed to file Form 5329 for each year and whether I needed to amend my original returns. You can see how it works here: https://youtu.be/_kiP6q8DX5c - it basically holds your place in the IRS phone queue so you don't have to stay on hold forever.

I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I was desperate enough to try it for my excess contribution issues. Honestly, I'm shocked at how well it worked. I had been trying to reach the IRS for almost three weeks with no luck. The service connected me to an IRS tax specialist within 45 minutes (they estimated an hour). The agent explained exactly how to handle both the 2023 and 2024 Form 5329 filings for my situation, and confirmed I could mail them together. They also explained I didn't need to amend my original returns since the excess contributions weren't deducted or claimed as credits. This saved me from a ton of confusion and potentially incorrect filings. I'm not someone who typically recommends services, but this genuinely solved a problem that was causing me significant stress.

One thing I learned the hard way - make sure you're using the correct version of Form 5329 for each tax year. They update the form yearly and the line numbers sometimes change. I filed with the wrong year's form once and had to redo everything. For 2023, use the 2023 version, and for 2024, use the 2024 version of the form. Also, document EVERYTHING. Keep records of when you made the excess contribution, when you withdrew it, and any correspondence with your IRA provider. The IRS sometimes comes back with questions years later.

Does anyone know if there's a way to get a waiver or reduction of the 6% penalty? My spouse and I had almost the identical situation (excess Roth contributions for 2 years before catching it), and we ended up paying nearly $800 in penalties. I've heard rumors there's some kind of "reasonable cause" exception but couldn't find clear info.

Just want to add a clarification about the penalty calculation that might help. The 6% penalty is calculated monthly, not annually, so if you withdrew the excess contribution in January 2025, you'd pay the full 6% for 2023 (since the money was in there the whole year) and 6% for 2024 (again, the whole year), but nothing for 2025 since you corrected it in January. Also, make sure when you withdrew the $6,500 that you also withdrew any earnings attributable to that excess contribution. If there were earnings, those need to be included in the withdrawal and will be taxable income for the year you withdraw them (2025 in your case). The IRS can be picky about this, so double-check with your IRA provider that they calculated the earnings correctly when processing your withdrawal. One more thing - since you're married filing jointly, make sure your 2024 income doesn't also put you over the Roth IRA contribution limits. You'll want to check this before making any 2024 contributions to avoid the same issue again.

One important thing to keep in mind for future years - consider doing a backdoor Roth conversion instead of direct Roth IRA contributions if your income is close to or over the limits. Since you're married filing jointly and exceeded the 2023 Roth IRA income limits, you likely will again in future years. With a backdoor Roth, you'd contribute to a traditional IRA (no income limits for contributions, though you won't get a deduction) and then convert it to Roth. Just make sure you don't have any other traditional IRA balances that would complicate the pro-rata rule calculations. Also, for your current situation, double-check that your IRA provider reported the excess contribution withdrawal correctly on the 1099-R they'll send you for 2025. The distribution code should indicate it was an excess contribution return, which affects how it's taxed. This will be important when you file your 2025 return next year.