I overpaid by $541 but I know the amount of the actual check and need to know if that is that is the figure I should use (lower because of market conditions) or the actual amount of the overpayment?
The below was helpful but doesn't help me with the amount I should report
You should report the refund of the excess contributions on Line 1 of your 2018 Tax Return by following these steps:
· Click on the "Federal Taxes" Tab
· Click on the "Wages & Income" Tab
· Click on "I'll choose what I work on"
· Scroll down to "Less Common Income" and click "Show More"
· Select "Miscellaneous Income" and click Start or Update
· Select "Other income not already reported on a Form W-2 or Form 1099" and click on Start
· Answer the Question "Did you receive any other wages? Yes
· Click "Continue" through the questions until you get to "Any Other Earned Income"
· Answer "Yes" to "Did you earn any other wages?
· Indicate "Other" as Source of Other Earned Income and click "Continue"
· For the description enter "2018 Excess 401K Deferrals" and click on Done
You will receive a 2019 Form 1099-R in 2020 showing the refund with a code "P" in box 7 which you can ignore if the excess deferral is reported as suggested above. However, the earnings will be reported on a separate 2019 Form 1099-R with a Code "8" in Box 7 that should be reported on your 2019 tax return.
By: TurboTaxRachelW
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You should include the full amount of your over-contribution, $541, as wages on your 2018 Tax Return.
You can report the $79 loss from your corrective distribution as a negative amount on Line 21 of Schedule 3 on your Form 1040. You should identify it as “Loss on Excess Deferral Distribution.” This loss should be taken in the year that you received the corrective distribution.
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