turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
turbotax icon
turbotax icon
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Found out I have excess 401k contribution after April 15, 2022. What to do?

I did my tax late after April 15th 2023. I had two employers and 2 separate traditional 401k plan, which causes a slight over contribution of $800 , which I did not discoverred until May 2023, I have already reported the excess in Turbotax for my 2022 return.

 

However, I asked my current employer plan about withdrawing the excess $800, they don’t allow me to do that because it is after the tax date, and they don’t allow me to do any early withdraw because I am still employed by my current company.

 

They suggest me to talk with my previous 401k plan about early withdrawal, but I already rolled it over to my IRA.

 

Two questions:

1. Can I just remove the $800 from one of my own IRA accounts to address the over contribution?

 

2. If step 1 is not okay, what is my best course of action to get this resolved?

Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

4 Replies
dmertz
Level 15

Found out I have excess 401k contribution after April 15, 2022. What to do?

1.  No.

 

2.  There is no point in doing anything.  You've already included the $800 in your 2022 taxable income and the $800 will be simply be taxed again when eventually distributed as a normal distribution.

Found out I have excess 401k contribution after April 15, 2022. What to do?

1. Can I just remove the $800 from one of my own IRA accounts to address the over contribution?  No ... you are stuck with this situation. 

 

2. If step 1 is not okay, what is my best course of action to get this resolved?  There is nothing you can do ... you will add the excess to your 2022 return and pay taxes on it   and you will ALSO pay taxes on it when you make a distribution later ... that is the penalty for making this error and not fixing it timely. 

Found out I have excess 401k contribution after April 15, 2022. What to do?

Hi @Critter-3 thank you so much for your reply. I am not too concern about the double tax since I am only $800 over, the tax is not significant. 

 

Do you suggest I withdraw the excess amount as soon as possible or should I wait until the retirement? It seems like peoople suggest to just wait until retirement to avoid early withdraw penalty. I still have  about 30 years till retirement. 

 

Thank you! 

Found out I have excess 401k contribution after April 15, 2022. What to do?

Wait. 

Manage cookies