As a sole proprietor, I recently opened a Self-Employed 401k plan with Fidelity. For most of 2023, I was a W-2 employee and contributed $18720 to my employer-sponsored 401k, and then for the remainder of the year earned self-employment income. I accidentally miscalculated and over contributed $90 to my self-employed 401k plan. I am now $90 over the 2023 401k contribution limit of $22500.
If I understand correctly, I need to withdraw the excess contribution of $90 from my Solo 401k, but when I called Fidelity, they told me they couldn’t help me calculate the earnings/losses. I only just opened the account last week (March 2024) and contributed the money. I received $2.67 in dividends already, but since I only just contributed that last week, does that even count as earnings for 2023? I have not yet filed my 2023 taxes but need to have this resolved before I do. Does anyone have advice for how to deal with the excess contribution?
Next is how to file this in my taxes. Do I deduct out the $90 from the Solo 401k employee contribution? Do I have to report that excess $90 anywhere?
