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You must include the excess deferral in your income for the
year of the deferral unless you have an excess deferral of a designated
Roth contribution. File Form 1040 to add the excess deferral amount to
your wages on line 7. Do not use Form 1040A or Form 1040EZ to report
excess deferral amounts
If you take out the excess after the year of the deferral and you
receive the corrective distribution by April 15 of the following year,
do not include it in income again in the year you receive it. If you
receive it later, you must include it in income in both the year of the
deferral and the year you receive it. Any income on the excess deferral
taken out is
Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. Include the loss as a negative amount on Form 1040, line 21 and identify it as “Loss on Excess Deferral Distribution.” Even though a corrective distribution of excess deferrals is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions.
How to do this in TurboTax:When I enter negative amount as described above, Turbotax is not allowing me to eFile my Federal tax returns. It says I need to fix the return and 'Wages, Salaries & Tips worksheet: TP other earned inc shouldn't be less than zero." Please help!!
Good evening. I entered the loss on the excess deferral to my Roth 401k by putting it as a negative number in other taxable income. Now I'm at the last step of filing my taxes with TurboTax but when I click "transmit returns now" I get the "check this entry" error and bring me to the "other earned income" page of my return showing the loss and it says "wages, salaries, & tips worksheet: TP other earned inc shouldn't be less than zero". It seems like it won't let me proceed until I remove the negative number. What should I do?
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