Excess contributions to 401K

[Debbie Przybylski]

Good Afternoon

I hope you are doing well during this pandemic.

In 2018 I contributed more than the max allowed 401K contribution due to having 2 employers.

I did include the taxable overage on my 2018 taxes (although I think I used a wrong figure and will likely have to amend those taxes). 

I did receive 1099 R forms and did populate all the boxes needed for my 2019 returns on my turbo tax forms.  I did have a loss from the excess deferral that I took out last year.  My question is where to report this amount in my 2019 return.  The letter fromFidelity states " the loss attributable to your excess deferral may be reported as a negative amount on the Other Income line of your 2019 Federal and State (if applicable) income tax returns." I tried to place this value in different areas of other income, but keep receiving errors.  What is your recommendation.

Thank you for your assistance.

[DavidD66]

To report as "Other Income" in TurboTax, while in your return:

• Type "Other Income" in the search window
• Click on "Jump to Other Income"
• Enter the information from your Form 1099-MISC, and click on Continue
• Enter a description such as "Loss on Excess Contribution" and click on Continue
• On the screen with "Does one of these uncommon situations apply?", indicate "None of these apply"
• Answer "No..." to "Loss on Excess Contribution involve work that's like your main job?"
• Answer "I got it in 2019" when asked "How often did you get income for Loss....?"
• Answer "No, it didn't involve an intent to earn money."

The amount will be reported on line 8 of Schedule 1 (Form 1040).

[B_T007]

where would you record a loss attributable to an excess deferral?

[MinhT1]

You would report it in Other Reportable income as a negative number for a loss.

In TurboTax, open your return and follow these steps:

• Click on Federal in the left-hand column, then on Wages and Income on top of the screen
• Scroll down to All Income, locate the Less Common Income section
• Click Show more and click Start next to Miscellaneous Income at the bottom
• On the next page, click Start next to Other Reportable Income.
• Enter your loss as a negative number and describe it as Loss on excess contribution to 401(k)