The "Excess Contribution" Audit: How to Fix a Roth IRA Mistake Without Paying 6%

You had a great year. You got a raise, a bonus, or got married. You also maxed out your Roth IRA. Bad news: Your new income pushed you over the MAGI limit ($165k Single / $246k Married). You now have an "Excess Contribution." If you do nothing, the IRS charges a 6% excise tax penalty EVERY SINGLE YEAR until you fix it. As The Finance Observer, I’ve performed a forensic review of IRS Form 5329 and the "Net Income Attributable" (NIA) formula. In this video, we dissect the "Recharacterization" fix (turning Roth into Traditional), the "Absorption" method (using future years to fix past mistakes), and the specific "Timeline of Pain" if you wait until after the tax deadline. 🔴 SUBSCRIBE FOR WEEKLY FINANCIAL DEFENSE: Protect your retirement from corporate erosion and hidden tax traps.    / @the-finance-observer   FORENSIC BREAKDOWN: 0:00 The "Good News" Problem: Earning too much for a Roth IRA 0:40 The Limits: 2025 MAGI Phase-Out Zones ($165k Single / $246k Married) 2:15 The Penalty Audit: The 6% Excise Tax (IRC Section 4973) 3:30 The "Timely Fix": Withdrawing before the deadline (The "Net Income Attributable" Rule) 4:25 The NIA Formula: How to calculate earnings on the excess contribution 5:15 The "Loss" Scenario: Why you withdraw LESS if the market crashed 5:45 The "Late Fix": The Untimely Withdrawal vs. Absorption Strategy 6:30 The Paperwork: Form 5329 Instructions (Part IV, Lines 18-23) 7:00 The "Multi-Year" Nightmare: Filing 5329 for 2023, 2024, and 2025 DISCLAIMER: I am The Finance Observer. This content is for educational purposes only. Excess contribution rules involve complex "Net Income Attributable" calculations; always consult a qualified CPA or use your brokerage's removal form to avoid calculation errors.