Excees Withdrawl of 401k and HSA

[brandonpearman]

In 2018  I had an excess in my 401k and HSA.  I withdrew funds from both in 2019 before the deadline had passed.  I properly accounted for both on my 2018 taxes.

What do I need to do for my taxes this year in regards to these excess withdrawals?

[MinhT1]

On your 2019 tax return, you'll have to report the earnings on the excesses as income.

[brandonpearman]

Can you be more specific about the sections where I would do/report this?

[BillM223]

1. You will be asked in the HSA interview if you "overfunded" your HSA last year. Be sure to answer "NO", because the question doesn't want to know if you had excess contributions in 2018, but whether or not you carried them over to 2019. You did not carry them over, because you withdrew the excess prior to the due date of the return. So that's easy, just say NO.

2. What Minh is referring to is the fact that you will get a 1099-SA this year (now) reporting the earnings on that excess while it was in the HSA. The 1099-SA will have a distribution code of '2' and the earnings will be in box 2, which, after you enter it, will be added to Other Income (as it should be).

Note that you will probably also receive a separate 1099-SA reporting your distributions (spending) on qualified medical expenses - just enter the two 1099-SAs separately in the HSA interview.

[brandonpearman]

Thanks.  I was able to get everything entered for my HSA overfunding.

What do I do for my 401k overfunding?

[DianeC958]

If you remove the excess before April 15, 2020 go through the section in Deductions and Credits>Retirement and Investments>Traditional and Roth Contributions. 

As you go through the screens you will come to a page titled Contributions Withdrawn before Due Date  here you enter the amount you with drew.  By reporting is here you will not have to pay the 6% penalty for the excess contributions.

You will receive a 1099-R in 2020 for the withdrawal to be reported on your return for 2020.

@brandonpearman