Covid actually meant a lot more OT for me that caused me to overcontribute by $1760. I'm using TaxAct Online for my taxes and once I entered the contribution, it added $106 to my tax, which I understand is 6% of the overage.

I assumed I would withdraw the overage and pay tax on the gains but now I'm wondering if I pay the $106, am I done? I'm seeing two choices: 1) pay $106 in tax and be done with it or 2) withdraw the overage, pay tax on the gains. I'm leaning toward 1) and leaving that money in that tax free vehicle to grow until I retire. 6% tax is less than my effective tax rate. That seems too easy.

How am I misinterpreting this, please?

When you over-contribute to a Roth IRA, the IRS calls it an excess contribution. The penalty for making excess contributions is 6 percent of the extra money per year until you remove it from the IRA. For example, if you contribute $1,500 too much, you'll be assessed $90 per year until you take it out of the Roth IRA.

Ah, every year, ok. Out it comes then, thanks.