Thank you so much for the detailed explanation, @dmertz! I really appreciate it. I haven't made any employer contribution, so I'll check with my 401k plan administrator tomorrow to see if the excess elective deferral can be re-designated as an employer contribution. There are actually two co-owners/employees in our S-Corp and we both need to adjust our 401K contributions. Does that make a difference compared to a single owner/employee?
If I re-designate the $1,450.24 excess elective deferral, does the S-Corp need to reimburse me for $1,450.24 because I made that contribution from my personal bank account, not from the business bank account? If so, does that reimbursement count as a business expense reimbursement for the 2020 tax year? I'm just a little confused about how the separation of bank accounts and the accounting would work.
Thank you very much!
