My husband operates a business as a sole proprietorship using Schedule C. He has two employees for which he contributes the employees 3% deferral as well as a 3% match monthly. Since he doesn't take a paycheck, at the end of the year, he puts in his personal contribution (employee deferral) and 3% of his income (employer match) before we file our taxes.
However, this year we had a death in our family at the end of January, as a result, we took the checks to the investment firm on February 1, not realizing we missed the January 30 deadline for his deferral contribution for 2023. As a result, when they tried to deposit the $10,000 "employee deferral" check, the system said employee contributions not allowed for 2023 so they deposited that amount as an employer contribution. That amount would've been far in excess of the 3% allowed to be allocated as "employer". Therefore, they withdrew the money (the original $10,000 along with $300 in earnings) as excess contributions. My question is this: I'm not sure how to reflect this on my 2023 taxes or is this something that will be reported on my 2024 taxes? Any advice is appreciated.
