@TaxTechno wrote:
Shouldn't I withdraw the excess contribution in 401k with 10% penalty? Otherwise, it seems I will have to pay 6% tax every year on the excess amount and earnings?
No. And there is no 10% or 6% penalty for a 401(k).
You pay tax on the excess now as explained above but the excess can then stay in the 401(k) plan because you must pay the tax. If returned by April 15 then there would be no tax to pay.
**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.**
