> > 2. Will I be penalized both for contributing too much and also early > > withdrawals?
>
> Neither. As I understand your narrative you got the money out the same day
> you put it in, so there were no earnings. Since you withdrew the excess
> before the extended due date of your 2007 return there's no excess
> contribution penalty, and since there were no earnings there's no premature
> distribution penalty. See Publication 590.
>
Well, it wasn't on the same day; it was a few days, perhaps a week or more later, when I looked at my bank accounts and saw that too much money had gone out. But, it was done before the 15th.
I'll read over publication 590.
> 3. Should I write to the IRS and try to explain the situation, or just
> > accept my penalties?
>
> You should have reported the return of excess contributions on your 2007
> return, line 15. Your choices are to wait until IRS inquires, if they ever
> do, or to file an amended return on Form 1040-X to explain what happened. >
> See the instructions for Form 8606.
>
Thanks, Phil! :)