The 2004 excess amount to your Roth IRA would have to be removed by October 15, 2005, to avoid the 6% penalty (assuming that you filed your tax return or filed for an extension on April 15, you receive an automatic extension to October 15, 2005 to remove excess amounts).

You have until October 15, 2006, to remove the 2005 contribution.

If you remove the excess amount plus any earnings or minus any losses by the deadline, your tax preparer will need to amend your return to remove the 6% penalty.

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For more on this, read Correcting Ineligible (Excess) IRA Contributions - Part 1, Part 2 and Part 3.

This question was answered by Denise Appleby
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