Hi,
Due to having multiple employers in 2020, I mistakenly contributed $39K to 401k ($19,500 for each employer). I have not filed my taxes yet for 2020 as I have extension until Oct, 2021. Issue is that when I file my taxes, Turbotax says I have excess contribution and I need to withdraw $19,500 from one of the employers. When I called Fidelity, they said they will issue a check for $19,500, but the 1099-R will show 2021 date on it with code P (excess contribution for 2020) and they will mail this form on January of 2022. They also said they will deduct taxes (estimated) for both federal and state. This does not help me as I really want the form now so that I know what to input in the tax software, and also I need the form to show 2020 date so that I can file my taxes for 2020 before Oct, 2021 deadline. On their view, I am in a new tax year and passed April, 2021 deadline for any correction although I have not as I have extension.
My question is what is the best way to go about it without having to pay penalty or being double taxed? I am confused now as to what I need to do this year and what I need to do next year for 2021 tax year.
