I have a 1099-R for excess 401K contribution made in 2022 and I already reported $2500 as other earned income on 2022 tax return. When I got the refund check, it listed as follows,
Excess contributions: $2500
(Allocable Loss) : ($500)
Amount of Refund: $2000
Now 1099-R form only has the Gross distribution of $2000 and doesn't have $500 loss.
My question is how to repot the loss of $500? If I don't, I have paid taxes for $2500 but in fact I should only pay taxes for $2000.
Thank you for your help!
You can't claim the the loss of Earnings from your withdrawal of 401K Excess Contribution.
Enter Box 1 as $2500 (the amount of excess contribution) and Box 2a as $0.
Here's more info on Loss on Withdrawn Excess Contribution.
MarilynG1's, reply is incorrect and provides a reference that does not apply. IRS Pub 525 says to report this loss on Schedule 1 line 8z as a negative $500 and identify it as "Loss on Excess Deferral Distribution." In TurboTax you do this by reporting it as an item of Other income.
Hi,
Thank you for your reply. Can you please let me know how to report it as an item of Other income?