@fe7565 wrote:
@macuser_22
Got here after many hours of search all over the internet and I think this thread has all the answers. But would like to confirm. Will try to be brief:
Tax year 2019: Changed jobs from 401k to TSP. Maxed out already 401K. So all contributions to TSP was excess amount. Missed TSP admin deadline for excess correction on 15 Apr 2020. So followed TurboTax advice and 'created" Form 4852 (1099-R substitute) with detailed explanation.
- On the form under 8.a. used Distribution code 8.
- Added employee portion of contribution under 8a. Gross distr. and also under 8b Taxable amount
- Noted all of gains under 8.e. Capital gain
I know now this way of doing it complicates things, but didn't know then. So I paid the taxes on the employee-portion of excess + investment gains on all gains resulting from employee + employer + matching contribution.
Tax year 2020: Contributed normally to TSP with the 2019 excess (employee + employer + matching contribution) also still sitting there. Did not reach max annual contribution limit even with both combined.
After procrastinating until now (13 Apr 2021) I wanted to do a withdrawal to clear this off the account. But based on what I read, since I still have a few years left before 59 1/2 age, I should just leave the excess in the TSP (since I already paid taxes on it + the gains derived from it), and just withdraw it as regular taxable TSP distribution after 59 1/2 age.
What about the employer + matching contribution portion from 2019 that I did not pay taxes on? And which was not taken back as a corrective action by the TSP admin because I missed the 15 Apr 2020 deadline?
What tax actions (of any) do I need to do? Thank you for your advice!
If this was contributed in 2019 then it should have been reported on the 2019 tax return with a 1099-R code P that would put the excess on the 2019 1040 line 1.
Since the excess was not removed but the 2020 April 1 due date, nothing should be reported on the 2020 tax return.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
