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In general, if the excess contributions for a year are not withdrawn by the date your return for the year is due (including extensions), you are subject to a 6% tax.
You will not have to pay the 6% tax if you withdraw an excess contribution made during a tax year and you also withdraw any interest or other income earned on the excess contribution. You must complete your withdrawal by the date your tax return for that year is due, including extensions.
However - earnings will be taxable.
The administrator of your IRA account should issue the reporting form 1099-R - www.irs.gov/pub/irs-pdf/f1099r.pdf
Be sure that the distribution code in the box 7 is 8-Excess contributions plus earnings
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No - if you withdraw an excess contribution in 2010 - the form will be issue in 2011,
just be sure to inform your bank that this is an excess contribution and should be reported properly.
Earnings - if any - will be taxable on your 2010 tax return.
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