Thank you for the answer(s) above.
What is to be entered as "other income" when this is a
a) disbursement for a 2022 excess 401(k) contribution dispersed in 2023 before 4/15/23
i) IF federal taxes have been withheld from the disbursement
ii) AFTER accounting for the investment loss before returning the balance to me?
Excess contribution:$1269.17
Loss: ($114.72)
Gross payment: $1154.45
Fed Income tax withheld: ($115.45)
Amt of disbursement provided: $1039.00
The plan states that
$1154.45 is the taxable portion for both federal and state.
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Yet Federal Tax has been withheld (a default %, not the actual due)
A) Is the $115.45 tax already accounted for in what would be reflected in the 2022 W2 (2022 Fed taxes) OR
B) Is this 2023 Fed Tax paid on a 2022-based reimbursement received in 2023 and therefore should be reported as 2023 income (amount of net reimbursement)?
.
