Do you have to calculate the earnings on excess contributions each year the excess Roth contributions remain in the account and pay tax based on that year's tax rates even though the funds will not be pulled out until the current year? I understand I will need to file amended tax returns with Forms 5329 to pay the 6% excise tax for each year that the excess Roth contributions remain in the account. Will I include the earnings on excess contributions on those amended returns?
If so, how would I handle loss years?
How would the penalty for the earnings be reported?