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401K Over-Contribution Not Being Refunded This Year
My employer messed up with some paperwork and as a consequence I contributed more to my 401K than the legal limit. I've talked to the plan administrator and they will process a refund but according to them this won't happen until the end for April and will be considered income for 2019.
Turbo Tax says that I need to file a 1099-R but I haven't had the money returned yet so there's no paperwork. What should I do here?
Additionally, TurboTax won't let me E-File my taxes since this is an "error" on the form. Is there a way around that or do I have to paperfile?
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Retirement tax questions
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Retirement tax questions
thank you
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thank you
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Retirement tax questions
If you overcontributed to your 401(k) in 2018 and the excess was distributed in 2019, you need to include the excess contribution to your 401(K) on line 1 of your 2018 Form 1040 by following these steps:
- Open your return
- Click on the "Federal Taxes" Tab
- Click on the "Wages & Income" Tab
- Click on "I'll choose what I work on"
- Scroll down to "Less Common Income" and click "Show More"
- Select "Miscellaneous Income" and click "Start or Update"
- Select "Other income not already reported on a Form W-2 or Form 1099" and click on "Start"
- Answer the Question "Did you receive any other wages? Yes"
- Click "Continue" through the questions until you get to "Any Other Earned Income"
- Answer "Yes" to "Did you earn any other wages?"
- Indicate "Other" as "Source" of Other Earned Income and click "Continue"
- For the description enter "2018 Excess 401K Deferrals" and click on "Done"
You will receive a Form 1099-R in 2019 with a code P in box 7 which you can ignore if the excess deferral is reported as suggested above. However, the earnings (if any) will be reported on a separate 2019 Form 1099-R with a Code "8" in Box 7 that should be reported on your 2019 tax return.
Unfortunately, you will need to paper file your return this year due to the excess 401(K) Contributions.
Please comment below if this does not answer your question so I can assist you further.