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stevehart
New Member

2nd job withdrew 4% of my income into a 401k to me in 2020. My 1st job maxes out my 401k. Result is excess $320 contribution. It is 5/17. How to I best address?

Vanguard will not facilitate withdrawing the money.  I've spoken with them twice.  They say it is too late.   The turbotax help suggests as long as I withdraw by 5/17, it should be okay.   Haven't done a withdrawl at this point because Vanguard won't help.   Its only $320.   I just want the problem to be resolved.   Thanks
1 Best answer

Accepted Solutions
DanaB27
Expert Alumni

2nd job withdrew 4% of my income into a 401k to me in 2020. My 1st job maxes out my 401k. Result is excess $320 contribution. It is 5/17. How to I best address?

The deadline to remove an excess deferral was April 15th, the date to remove excess salary deferrals has not been extended (IRS April 8th). Since it is after the deadline you can leave the excess in the account but you will be taxed twice on the excess amount. Once when you take the distribution and once on your 2020 tax return.

 

Please follow the steps below to report the excess deferral:

  1. Login to your TurboTax Account 
  2. Click "Federal" from the left side of your screen
  3. Scroll  down to "Less Common Income" and click "Show More"
  4. Scroll down to "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 answer "Yes" and click "Continue"
  7. Continue until you get to the "Any other earned income" screen, answer "Yes" and click "Continue"
  8. On the "Enter Source of Other Earned income" screen select "Other" and click "Continue"
  9. On the "Any Other Earned Income" screen enter "2020 Excess 401(k) Deferrals" for the description, enter the amount and click "Done".
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3 Replies
DanaB27
Expert Alumni

2nd job withdrew 4% of my income into a 401k to me in 2020. My 1st job maxes out my 401k. Result is excess $320 contribution. It is 5/17. How to I best address?

The deadline to remove an excess deferral was April 15th, the date to remove excess salary deferrals has not been extended (IRS April 8th). Since it is after the deadline you can leave the excess in the account but you will be taxed twice on the excess amount. Once when you take the distribution and once on your 2020 tax return.

 

Please follow the steps below to report the excess deferral:

  1. Login to your TurboTax Account 
  2. Click "Federal" from the left side of your screen
  3. Scroll  down to "Less Common Income" and click "Show More"
  4. Scroll down to "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 answer "Yes" and click "Continue"
  7. Continue until you get to the "Any other earned income" screen, answer "Yes" and click "Continue"
  8. On the "Enter Source of Other Earned income" screen select "Other" and click "Continue"
  9. On the "Any Other Earned Income" screen enter "2020 Excess 401(k) Deferrals" for the description, enter the amount and click "Done".
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

stevehart
New Member

2nd job withdrew 4% of my income into a 401k to me in 2020. My 1st job maxes out my 401k. Result is excess $320 contribution. It is 5/17. How to I best address?

Thank you.  This was perfect. 

fanfare
Level 15

2nd job withdrew 4% of my income into a 401k to me in 2020. My 1st job maxes out my 401k. Result is excess $320 contribution. It is 5/17. How to I best address?

just think of it as a non-deductible contribution to your 401k, but no hassles with Form 8606.

It will grow tax-deferred.

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