Thank you so much for the quick response, Kaye!
a) I did make 2021 max contribution this past January (I always do it in January).
b) I’ll make sure my 2021 income will be below $125,000 to make it simple (as long as I postpone a Roth rollover/conversion from 403b to later). So this year’s $7000 should not be excess.
From your answer, it sounds like the only money I owe is the 6% penalty?
I thought everything should be reverted to as if the excess contribution were not made, so why can I keep the earnings in the Roth account?
(I get it that if the earnings stays in the Roth, then it’s not taxable.)
If earnings can stay in Roth, then I don’t need to have the brokerage calculate it, and don’t need to report it?
(I read from https://www.investopedia.com/articles/retirement/04/042804.asp
this formula: Net income=excess contribution×(ACB−AOB)/AOB
Is it not relevant to me?)
Do I need to file 1040-X amended return?
Thank you very much!