Turbo Tax won't let me file due to excess contributions to my 401k. However I already filed the 1099-R. What am I supposed to do?

[MichaelL1]

https://ttlc.intuit.com/replies/7327357

[rehrenbard]

@TurboTaxMichaelL1

Thank you for providing this! I have a follow up question:

I am confused in steps 4 and 5. I received two 1099-R forms and have reported the withdrawals in the 'Retirement Plans and Social Security' section. However I only received 1099-Rs with codes 8 and 8B.

Do I ALSO need to create my own 1099-R with code P to write in the amount I over-contributed?

As I did not receive this 1099-R.

My overcontributions were withdrawn at a loss, so it also had me separately write in the loss amounts under 'Miscellaneous Income' - 'Other reportable income'. Is this correct?

Any additional information would be greatly appreciated! Thank you!

[MichaelL1]

@dmertz any suggestions?

[dmertz]

The Forms 1099-R that you received seem to suggest that the excess elective deferrals for 2018 were distributed in 2018.  If so, there would be no code P Form 1099-R.

What year is shown on the Forms 1099-R?
In what year did you receive the distribution of the excess?

[rehrenbard]

@dmertz @TurboTaxMichaelL1

That is correct! They were distributed in 2018.

I over-contributed to my 401k / Roth 401k in 2018.
I withdrew the funds in 2018.
I received one 1099-R for the 401k excess, and one 1099-R from the Roth 401k excess.
Both 1099-R forms are from 2018.

And I did not make money, the withdrawals were done at a loss from my contribution.

I have input the excess contributions in my W2, I have input both 1099-Rs and I have input the loss amounts in miscellaneous income.

Is there anything else I should do? Mostly confused if I need to put the excess contributed somewhere as well?

Thank you so much!

[dmertz]

The excess that was contributed to the traditional 401(k) needs to be included in the amount on Form 1040 line 1.  This is generally done by entering the amount of the excess contribution under Wages & Income -> Less Common Income -> Miscellaneous Income, 1099-A, 1099-C -> Other income not already reported on a Form W-2 or From 1099.  Answer Yes to Other Wages Received, answer Yes to  Any Other Earned Income, select Other as the source, then enter the excess amount contributed to the traditional 401(k).

[rehrenbard]

Thanks @dmertz !

Just to confirm, in this case I am technically putting the excess contributed as income twice for the traditional 401k, once in the 1099-R and once in the Miscellaneous income. Correct?

Also, I think this is what you meant by traditional, but just confirming I am only supposed to put the excess contributions to my 401k as income here and not the excess to my Roth 401k, right?

I am reading this document: <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p525.pdf">https://www.irs.gov/pub/irs-pdf/p525.pdf</a>
On page 10 under 'Excess distributed to you.' It reads:

"If the distribution was for a 2018 excess deferral, your Form 1099-R should have code 8 in box 7. Add the excess deferral amount to your wages on your 2018 tax return."
"If the distribution was for a 2018 excess deferral to a designated Roth account, your Form 1099-R should have code B in box 7. Do not add this amount to your wages on your 2017 return."

Does that sound correct?

So I will have this input as:
 - Both excess contributions on W2
 - Only the traditional excess manually entered as miscellaneous income
 - Both 1099-Rs input
 - Both losses entered as miscellaneous income

Thank you again!

[dmertz]

Is the amount in box 2a of the code 8 Form 1099-R zero (which is what I would expect)?  If so, the excess is only being included in income once, not twice.

No losses are to be entered as miscellaneous income.  If the code 8 Form 1099-R shows the same amount in box 2a as is in box 1, resulting in the box 2a amount being included on Form 1040 line 1, amount of the loss on the money while it was in the traditional IRA needs to be included as Other income not reported on a W-2 as I described above.

[rehrenbard]

@dmertz Thanks again!

Box 2a of the code 8 form 1099-R is zero on the Roth 401k form. So I will not report that twice.

For the code 8 form:
 - Box 2a for the traditional 401k matches Box 1.
 - It is less than the amount I contributed.
 - It doesn't actually say the amount I over-contributed to my 401k, so I just got this from my W2 and am including it as Wages & Income -> Less Common Income -> Miscellaneous Income, 1099-A, 1099-C -> Other income not already reported on a Form W-2 or From 1099
 - This is thus reported twice, once under income and once under the 1099-R.

Last question on losses:

I currently have included the loss under Less Common Income - > Miscellaneous Income, 1099-A, 1099-C -> Other reportable income
Should it instead go under 'Other income not already reported on a Form W-2 or Form 1099' as you've said above ?

And can I include losses for both the traditional and Roth 401k here?

Thanks so much!

[dmertz]

Since the code 8 From 1099-R shows a taxable amount in box 2a, report under Less Common Income only the difference between the amount in box 2a of the code 8 Form 1099-R and the excess contribution that this loss-adjusted amount represents.  This will result in an addition to the amount on Form 1040 line 1 of exactly the amount of the excess.  Nothing else regarding any of this should add to income.  The result will be equivalent to what line 1 would have had had the excess elective deferral never been made and had instead appeared in box 1 of your W-2.

[rehrenbard]

@dmertz thank you!

So now for the 1099-R code 8, I have submitted the 1099-R with the taxable income amount
AND
have separately submitted the (excess contribution - amount in box 2a) under
Wages & Income -> Less Common Income -> Miscellaneous Income, 1099-A, 1099-C -> Other income not already reported on a Form W-2 or From 1099

For the 1099-R code 8B, I have submitted the 1099-R and no additional income.

For both 1099-R forms, I have submitted the losses under Less Common Income - > Miscellaneous Income, 1099-A, 1099-C -> Other reportable income

Which seems correct as here: <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p525.pdf">https://www.irs.gov/pub/irs-pdf/p525.pdf</a>
It says: Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. Include the loss as a negative amount on Schedule 1 (Form 1040), line 21, and identify it as “Loss on Excess Deferral Distribution.”

Let me know if this sounds right to you.

Thanks again!

[rehrenbard]

@dmertz Now it is asking for the payer information of this unknown 1099-R. Is that my employer or Fidelity or who? Thanks again for all your help!

[dmertz]

I said to enter the loss amount under Other income not already reported on a Form W-2 or Form 1099, not under Other reportable income so that it gets added to Form 1040 line 1, not to Schedule 1.

I wasn't aware that the loss on the excess contribution was excludible from income.  What you do want to appear on Schedule 1 line 21 is a negative amount to offset the loss reported under Other income not already reported on a Form W-2 or Form 1099.  To do that (in addition to everything else that I've already mentioned), go to Less Common Income - > Miscellaneous Income, 1099-A, 1099-C -> Other reportable income and make the loss amount you entered there a negative number.

[rehrenbard]

@dmertz Sorry now I am confused.

You are saying to go to Less Common Income - > Miscellaneous Income, 1099-A, 1099-C -> Other reportable income and make the loss amount you entered there a negative number.

Isn't that exactly what I said I did?

I have submitted 2 negative amounts there for the losses I incurred from both the traditional and Roth 401k.

That seems to be what you are saying in your second paragraph. But your first paragraph says "I said to enter the loss amount under Other income not already reported on a Form W-2 or Form 1099, not under Other reportable income"