Hi @DianeW777 and @DanaB27 ,
I've seen your response to this post and I was wondering if I can ask a similar question for the situation I am in. I have already posted my situation in the community in another post, but I wanted to confirm with another person before I submit my taxes.
I have a W-2 job, but I also earn 1099 income. I have 401k plan with my employer for my W-2 job, and I have a separate solo 401K plan that I use for my 1099 income.
For my W-2 job, I contributed the maximum allowable to my 401k plan for 2023 ($22,500) as employee deferrals.
After starting my taxes for 2023 using the Turbotax Desktop, I realized I over-contributed to my solo 401k plan by $25, and earned $3 on that while in the plan. This was because I failed to subtract the 1/2 of SE tax when calculating the 20% of net SE earnings. I already filed with Fidelity the overcorrection this week which is in the process of being withdrawn.
Since I haven't filed my 2023 taxes, I just need help on how I should report the contribution and over-contribution on the Desktop Home & Business Turbotax 2023.
1) Under "Less Common Business Situations" and then "Self-Employed Retirement," do I report the amount I contributed to the solo 401K plan including the over-contribution (including the $25) or do I deduct the over-contribution from that amount in that section?
2) In the same section where the contribution amount is placed, does my excess contribution to the solo 401K go under "Elective Deferrals" or "Employer Matching" since I maxed out my W-2 employee 401K plan? I am curious since the over-contribution could be for employee deferrals or employer contributions, and I am not sure if one is preferred over the other?
3) How do I report an over-contribution to my solo 401K plan I use in the Turbotax Home & Business Desktop, since it came from self-employed income/plan and not my W-2 income/401k plan?
Do I need to report in my 2023 taxes if it is withdrawn before tax day (as I've done) and I keep the over-contribution income ($25) in my Schedule C? Then just wait until 2024 to report the $3 earnings? Or do I have to report in 2023 as extra income and then the earnings in 2024?
I am just confused since this is coming from my self-employed 401k plan/income
Thank you so much in advance
