It won't let me e-file with 1040A line 12b being over $18,500. Now that excess contribution ($681) amount has been distributed by plan admin. and listed as a 1099-R, is it OK to reduce the 401k contribution line on my W-2 by $681?
My employer said they are not sending out a corrected W-2.
Or do I need to keep the W-2 as is and will be forced to file by mail
Was this a 2017 contribution returned in 2018?
Is this a 2018 1099-R?
What code is in box 7 on the 1099-R?
What is in box 1 and 2a?
No this was a 2018 contribution, returned prior to 4/15/ 2019. I requested the excess be distributed, and Fidelity sent check out in March of 2019. I didn't get an actual 1099-R from fidelity yet, they say it will come out in January 2020 (the funds lost value, so there won't a profit made on contribution).
Turbo tax said list a 1099-R anyways, list the over contribution amount in box 1 and 2a.
For box 7, "this a 2018 contribution returned in 2019" seems most accurate.
You said "1040A line 12b " - that is a 2017 tax return. There is no 2018 1040EZ and line 12bo on the 2018 1040 is Schedule 3 entries.
For a 2018 excess deferral returned in 2018 enter it this way:
You do not need to wait for a 1099-R next year that will probably require you to amend your 2018 tax return to report the
excess on line 1 of your tax return - it can be entered this way and then ignore the 2019 1099-R with a code P in box 7 when it comes.
There are two methods to do this:
1) Enter a 1099-R with the returned contribution amount (not including earnings) in box 1 & 2a, and a code "P" in box 7. When asked what year 1099-R say 2019.
or 2)
Excess 401(k) deferrals should be reported in:
(There are several screens to click through to get to the right place)
Miscellionious Income ->
Other Income not reported on a W-2 ->
Other wages (yes) ->
House Hold employee (Continue) ->
Sick Pay (Continue) ->
Other earned income (yes) (Includes excess salary deferrals)->
Source of income (other) ->
Any other income - enter the amount of the excess deferral and an explanation.
This will add the returned excess to your 2018 wages on line 1 exactly the same way that the 1099-R would. The only information that is sent to the IRS is the line 1 amount.
[Note: If there were any earning that were returned in 2019 then the earnings will be reported on a separate 2019 1099-R with a code 8 that goes on your 2019 tax return - do not enter the earnings here.]
Both methods will add the returned excess to your 2018 wages on line 1 exactly the same way that the 1099-R would. The only information that is sent to the IRS is the line 1 amount.
For information see IRS Pub 525 page 10
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p525.pdf">https://www.irs.gov/pub/irs-pdf/p525.pdf</a>
Thank you for the detailed response. Once the excess is returned and indicated as 2018 wages using any method that you mentioned. Am I safe to reduce the amount of 401K contribution from what is listed by my W-2?
That seems to be the main problem turbo-tax error check is having, it keeps pointing out that the 401K is over $18,500 at error check.
No. Enter the W-2 as is. The W-2 reports what happen in the past ans you cannot change the past. The W-2 take the excess out of your income and either of the above methods puts it back.
Ok, then how do I get around the error check bug that is stopping me when I try to efile?
If you entered a 1099-R then delete it.
What does error check say?
Thank you. The error goes as follows (after running federal smart check or just before efiling)
"We found 2 areas on your federal return where we'll need to review your entries. We'll handle them one at a time". (Hit "check entries")
(Forms W-2 and W-2G Summary: Elective deferrals - TP $19181 is more than the allowed $18500" for a 401K plan. Please check your entries on your W2 for 401K plans".
Below this text is shown a entries from a form titled: "Form 1040 Forms W-2 & W-2G Summary 2018"
The entry in Line 12 b "Elective deferrals to qualified plan" (19,181) is highlighted blue with red text. Only "continue" is available. Hitting continue brings up a repeat of the screen described above.
After that I can either "Run Smart Check Again" or "Done". If I'm at a review stage, "Done" moves onto the next step (i.e. moves from federal to state". However, at the efiling stage, hitting "Done" takes me back to "We found 2 areas..."
I would delete the W-2 and re-enter. I made a test return and entered a W-2 with a code D and $30,000 in box 12 and smart check did not complain.
If not I suggest calling customer support who can review your tax return.
Here is a TurboTax FAQ for contacting customer support.
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number">https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number</a>
Was it $30,00 in Box 12D, elective deferrals to 401K specifically?
Also, since it's just a summary form (that says keep with my record), can I just override the value in the summary form and not change any of the W-2 info? Will turbo tax still let me efile?
I am having the same problem. I have done everything step by step. I also deleted w-2 and reentered it. No luck.
That should just alert you to the fact that the deferral exceeds the limit which you already know. You should be able to just ignore it.
In theory yes, however at the final error check before efile it just acts like a loop, no way to ignore the error and proceed. Will calling customer support to tonight.
It doesn't for me. It asks to run smart check again or [done]. If done, it moves on.
Yes I am on the final step and it will not let me file. It brings up the same thing over and over.
What version of TurboTax are you using - the CD/download version of the online version?
I have the exact same problem. I got the refund, entered the 1099-R, but TurboTax still will not let me file because it says I over-contributed to my 401K. Totally stuck. I have the CD version of Turbo Tax Deluxe 2018, Application: 2018.r20.043, Build Date: Mar 22, 2019 at 8:23:41 PM
What happens if you just click [done] with smart check and move on?
It might repeat the smart check again, but done should then get to the next screen.
It REFUSES to file. You can skip it all the way to filing, but it will NOT e-file.
No. It says "Check this entry... blah blah blah more than allowed for a 401k plan" and then if you click CONTINUE it just starts the error all over again.
This seems to be a new problem, probably caused by the latest update.
I have reported several complaints to the Moderators.
You can call customer support when they open tomorrow.
Here is a TurboTax FAQ for contacting customer support.
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number">https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number</a>