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sballister
New Member

If i report excess 401k deferrals (2 plans) after 15 Apr do I need to remove the funds now? I prefer to do so when i am retired since it will be taxed again

neither plan exceeded 24,500, just the total
1 Reply
macuser_22
Level 15

If i report excess 401k deferrals (2 plans) after 15 Apr do I need to remove the funds now? I prefer to do so when i am retired since it will be taxed again

If this was a 2018 excess and not removed before Apr 15, 2019 then it is too late to remove it now.   It must be reported as 2018 taxable income and will be taxed again when finally distributed as a normal 401(k) distribution.  IRS pub 525 explains this.


Excess 401(k) deferrals should be reported in:
(There are several screens to click through to get to the right place)

Miscellionious Income ->
Other Income not reported on a W-2 ->
Other wages (yes) ->
House Hold employee (Continue) ->
Sick Pay (Continue) ->
Other earned income (yes) (Includes excess salary deferrals)->
Source of income (other) ->
Any other income - enter the amount of the excess deferral and an explanation.

This will add the returned excess to your 2018 wages on line 1 on the 1040 form.


For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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