Self employed

Thank you very much for your response.

TurboTax says that I must withdraw the excess from the plan, or may have to pay penalty.

Which option should I shoose for withdrawal based on the definitions below? 

 

Type Description Action required

Nondeductible contributionEmployer contributions to a qualified plan in excess of the applicable deduction limit for the plan year.Nondeductible contributions remain in the plan and may be carried forward and deducted in subsequent years. The employer may be subject to a 10% excise tax on the nondeductible amount each year until corrected (refer to IRS Form 5330). Vanguard doesn't need to be notified of this type of excess.
Excess deferralEmployee deferral in excess of the limit under the Internal Revenue Code (IRC) Section 402(g).In general, the excess deferral amount and earnings must be distributed to the participant by April 15 of the year following the year the excess deferral was made. If the excess deferral isn’t distributed by the April 15 deadline, the employer may be eligible to make a corrective distribution under the Employee Plans Compliance Resolution System (EPCRS).
Excess annual additionsTotal additions to a participant’s account, which exceed the lesser of 100% of the participant’s compensation or the dollar limits under 415©. These may include both salary deferral contributions and employer contributions.In general, the portion of the excess attributable to employee deferrals may be returned to the participant, and any remaining excess is reallocated in accordance with the terms of the plan.
Mistake of factA mistaken contribution (generally due to a mathematical error). The types of errors that may be considered a mistake of fact are very limited (see IRS Revenue Ruling 91-4).Mistakes must be corrected within 1 year of the mistaken contribution. The mistaken contribution (reduced by losses) will be returned to the employer.

We recommend that you consult with a financial or tax advisor before selecting this option.