[Event] Ask the Experts: Extension Filers

To correct your wife's excess 401(k) deferral, contact her plan administrator to withdraw the excess contribution and any earnings. Be sure administrator knows this reason for withdrawl as it affects the distribution codes for the 1099-R.  These funds will be distributed back to her.

Because the correction occurs after April 15th, the excess amount will be subject to double taxation:

• Taxed in 2024: For the year the excess contribution occurred.
• Taxed in 2025: When the distributed funds are received, and a 2025 Form 1099-R is issued.

Steps to Report the 2024 Correction in TurboTax:

1. Log in to your TurboTax account.
2. Select Federal on the left menu.
3. Scroll to Less Common Income, then click Show More.
4. Choose Miscellaneous Income, 1099-A, 1099-C and click Start.
5. Select Other income not already reported on a Form W-2 or Form 1099 and click Start.
6. On the "Did you receive any other wages?" screen, select Yes and click Continue.
7. Continue to the "Any other earned income" screen, select Yes, and click Continue.
8. On the "Enter Source of Other Earned Income" screen, select Other and click Continue.
9. On the final screen, enter:
   • Description: "2024 Excess 401(k) Deferrals"
   • Amount: The excess contribution
10. Click Done to complete the entry.

This process will ensure the excess deferral is included in your 2024 wages as required.

@user17580792719 Thanks for the question!!