I changed my job in 2023 after making the maximum annual contribution to my pre-tax 401(k) account in the previous job ($22,500). In the new job, I contributed $10K more and that exceeded the annual limit.
At first, I was planning to remove the excess amount from previous employer's 401(k) plan back to the allowed limit, however the plan administrator declined that request saying excess contribution wasn't their fault. The new employer can remove the contribution, but they would also remove their 100% match for the $10K contribution. Therefore, it seems like a better idea to pay the "penalty" rather than losing the generous match.
So my questions are:
1) How can I properly report the excess contribution in my 2023 tax return to pay the penalty without removing the excess contribution in the account?
2) Will I have to keep track of this excess contribution until retirement, when I start getting money out of the 401(k) account? If so, what exactly do I need to track and does Turbotax help with it?
