DanaB27
Expert Alumni

Retirement tax questions

You will still have to include the excess in your wages on your 2020 tax return with the steps below.

 

  1. Click "Federal" from the left side of your screen
  2. Scroll down to "Less Common Income" and click "Show More"
  3. Scroll down to "Miscellaneous Income, 1099-A, 1099-C" and click "Start"
  4. Select "Other income not already reported on a Form W-2 or Form 1099" and click "Start"
  5. On the "Did you receive any other wages?" screen answer "Yes" and click "Continue"
  6. Continue until you get to the "Any other earned income" screen, answer "Yes" and click "Continue"
  7. On the "Enter Source of Other Earned income" screen select "Other" and click "Continue"
  8. On the "Any Other Earned Income" screen enter "2020 Excess 401(k) Deferrals" for the description, enter the excess contribution amount and click "Done".

 

Please be aware, that since you did not take out the excess amount by April 15th  you are taxed twice on the excess deferral left in the plan.  This happens once when you contribute it (with the steps above) and again when you receive it as a distribution (get Form 1099-R). You can't include the excess amount in the cost of the contract even though you included it in your income.

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