I contributed to both Traditional and Roth 401k accounts through two different employers in 2015. The total contributions were over the 18k limit, and I am having the excess removed from the Roth 401k account. How do I report this in TurboTax (which did not identify the issue itself), and what tax forms should I expect to receive?
There doesn't appear to be a BP code as an option within the 1099-R form in TurboTax. Should the code be left blank?
B and P are separate, paired codes. Select code B on one of TurboTax's box 7 drop-down lists and code P on the other.
Because the excess being distributed has already been taxed, it does not need to be reported on your tax return as income. You'll probably receive a code BP 2016 Form 1099-R for this amount with a taxable amount of zero. If you enter this form into TurboTax, it will have no effect on your tax return at all since the taxable amount will be zero. If there are also gains on your excess Roth 401(k) deferral that must be distributed as well, these will be reported on a code 8B 2016 Form 1099-R and will be taxable on your 2016 tax return.
Thanks. Will I have to amend my 2015 return once I receive the 2016 1099-R with code BP, since it would be for a prior year? Can I safely file my 2015 return without it?
Also, I think it is likely I will end up with a loss rather than "earnings" attributable to the excess. Should these be reported differently?
There is no need to enter the code BP 2016 Form 1099-R on your 2015 tax return either now or as an amendment, although there is no harm in entering it now. Doing so will have absolutely no effect on the tax return. (Try it and see. The amount in box 1 will be the amount of the excess distributed (adjusted for loss), box 2a will be zero. You'll see no effect on any part of your tax return including Form 1040 lines 7 and 16.)