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Solved

How to Report Loss on Excess 401k Contribution

Forum|Forum|2 years ago
August 16, 2023
1 reply
1 view

I mistakenly over contributed to my 401k due to multiple employers. I recognized this mistake, had the excess contribution returned, and know how to report this excess contribution on my tax return for the year thanks to this forum. What I was hoping someone can help with is how to report the loss attributed to excess contribution. My excess contribution was returned minus the loss while invested in the plan. Can I report this loss as a negative amount on the “other income” line of my tax return or is there another way to report the loss?

Thanks in advance for your help.

Best answer by dmertz

Expert Reviewed

See IRS Pub 525 where it says,

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 Schedule 1 (Form 1040), line 8z, and identify it as “Loss on Excess Deferral Distribution.”

dmertzAnswer

Level 15

Expert Reviewed

See IRS Pub 525 where it says,

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 Schedule 1 (Form 1040), line 8z, and identify it as “Loss on Excess Deferral Distribution.”