Thank you! 🙂
Ok, now I know how to correctly report the excess in the year it happened.
I would now like to understand about correctly reporting the withdrawal.
Q1) I understand from reading around the IRS site that since I missed the April deadline, I will pay income tax on all withdrawals, regardless whether it came from pre-tax or from Roth 401k. Is this correct?
Q2) I earned some bonuses at work and my tax bracket is quite high right now. I cannot see into the future, but I expect that it might be significantly lower in 3-4 years. So, I'd like to understand whether I can correctly adjust my 2022 tax using the 1040/1h method discussed above, but AVOID taking the excess distribution immediately. What if simply do not withdraw the money right now and keep it in my 401k?
In a few years, when my upper tax bracket is lower, THEN I take the withdrawal.
- I read that for IRA there is an additional 6% penalty for doing this, but I cannot see it mentioned anywhere for 401k. Am I missing anything?
- Is there anything wrong with doing it this way?
Thank you!
