Client has been making contributions to ROTH IRAs for 2021 and 2022 but is over the income limit.
Both 2021 and 2022 contributions will be withdrawn (plus potential earnings) for both years prior to 4/15/2023. This resolves the issue with the 2022 contribution.
For the 2021 excess contribution it appears that they need to file an amended 2021 return to account for the associated penalty. And then pay the penalty again on the 2022 return, as the contribution was not withdrawn in 2022.
Any chance that they don't have to pay the 2022 penalty on the 2021 excess contribution if the amount is withdrawn prior to 4/15/2023? Or did this need to be withdrawn by 12/31/2022 to avoid the penalty?