Overfunded 401(K)s in 2017 because I had two jobs: Deferred $9K at 1st job. Deferred $18K plus $31K in defined contributions at 2nd job. I'm over the 2017 $18K limit for deferred contributions and the $54K limit for total contributions. Neither employer will make a corrective distribution since "accounting year is closed."
You'll need to sign in or create an account to connect with an expert.
Assuming that your regular contributions were traditional elective deferrals and not Roth contributions, because these were excluded from the income reported in box 1 of your W-2 from the two employers, the $9,000 must be added back to your income. To enter the $9,000:
TurboTax will include the $9,000 on Form 1040 or 1040A line 7.
The "penalty" for the excess deferral will be that this money will be taxable again when later distributed from the 401(k) as part of a regular distribution at some point in the future.
As for the $54K limit, that limit is a per-plan limit, not a per-individual limit. You apparently contributed $18K in regular contributions and $31K in after-tax contributions to the second employer's plan. As long as this employer did not contribute more than $5,000 in matching or profit sharing contributions, the $54K limit was not exceeded. If the total employee and employer contributions to this plan did exceed $54K, the employer MUST make the correction or risk disqualification of the company's entire retirement plan.
Assuming that your regular contributions were traditional elective deferrals and not Roth contributions, because these were excluded from the income reported in box 1 of your W-2 from the two employers, the $9,000 must be added back to your income. To enter the $9,000:
TurboTax will include the $9,000 on Form 1040 or 1040A line 7.
The "penalty" for the excess deferral will be that this money will be taxable again when later distributed from the 401(k) as part of a regular distribution at some point in the future.
As for the $54K limit, that limit is a per-plan limit, not a per-individual limit. You apparently contributed $18K in regular contributions and $31K in after-tax contributions to the second employer's plan. As long as this employer did not contribute more than $5,000 in matching or profit sharing contributions, the $54K limit was not exceeded. If the total employee and employer contributions to this plan did exceed $54K, the employer MUST make the correction or risk disqualification of the company's entire retirement plan.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
run2winmom
Returning Member
topmiller
Level 3
Dan S9
Returning Member
dyons
Level 3
stephenrkg
Level 2
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.