Hi,
I filed a return of excess Roth 401k contributions for 2019 (had 2 employers) from the 40K manager and they sent me a check for the excess Roth distribution along with the earnings on the excess.
I know I will get a 1099-R for the earnings and will file that with my 2020 taxes.
On my 2019 taxes my total W-2 Roth Contribution shows that I exceeded the 2019 limits. My question is how I report that I properly had the excess ROTH (After Tax) funds returned prior to the April 15th deadline?
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Incorrect post removed.
For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
No, @macuser_22 . The excess is not includible as miscellaneous income because Roth contributions are not excluded from box 1 of the W-2 in the first place. At most, all that is needed with the 2019 tax return is an explanation statement indicating that the excess was distributed before April 15, 2020.
You are correct in assuming I received the distribution in 2020 for 2019 excess contribution. Plan would not do the refund until I provided both W2's showing the excess.
Quick clarification question - The excess amount however was returned from Roth funds (after tax) so if I add that amount to my 2019 Line 1 would I not be paying tax again on that amount because line one already reflects that amount? Thanks in advance for your insightful discussion.
Thank you for the insightful discussion!
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