Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Your taxes, your way. Get expert help or do it yourself. >> Get started
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
emorypt
New Member

I was told a refund of excess 401K 2017 plan year contribution, received in 2018, would not affect my 2017 taxes. Why did they jump up $60.00 when I reported $239?

 
1 Best answer

Accepted Solutions
Rachel_W
Level 4

I was told a refund of excess 401K 2017 plan year contribution, received in 2018, would not affect my 2017 taxes. Why did they jump up $60.00 when I reported $239?

The excess 401(k) contribution is added back into your Wage Income for 2017, so there will be an increase in your tax liability.

Taking the excess contribution out before the due date of your return keeps you from being taxed twice on the excess contribution.  If you fail to withdraw the excess 2017 401(k) Contribution by April 17, 2018, you will be taxed on this amount now and then again when you actually take it out.

You can check out IRS Pub 525, Page 10, for more information: https://www.irs.gov/pub/irs-pdf/p525.pdf

View solution in original post

1 Reply
Rachel_W
Level 4

I was told a refund of excess 401K 2017 plan year contribution, received in 2018, would not affect my 2017 taxes. Why did they jump up $60.00 when I reported $239?

The excess 401(k) contribution is added back into your Wage Income for 2017, so there will be an increase in your tax liability.

Taking the excess contribution out before the due date of your return keeps you from being taxed twice on the excess contribution.  If you fail to withdraw the excess 2017 401(k) Contribution by April 17, 2018, you will be taxed on this amount now and then again when you actually take it out.

You can check out IRS Pub 525, Page 10, for more information: https://www.irs.gov/pub/irs-pdf/p525.pdf

About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.49m
Members

2.62m
Discussions

Manage cookies
v