TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

[macuser_22]

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@imangoldasteh wrote:

@macuser_22 

I am going to exactly use this method so my question is do I need to deduct the amount that I received (excess 401k) from w23 box 12?  I just have original w2          can I deduct that amount from box 12 (401K) and keep box 1 the same and just use the method you mentioned to pay taxes?

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You file the W-2 exactally as received.  You cannot change the W-2 amounts since that reflects what actually happened.   The 1099-R for the removal adds to back to your wages.

[imangoldasteh]

@macuser_22 

when the amount on box 12 goes above the limit software automatically tax that amount and since I put that on "Income not reported anywhere else" I am again going to pay taxes!   am I missing something here?  thats why I deducted box 12 to avoid double taxation 

[DaveF1006]

it depends on if the administrator refunded you the excess amount and earnings. You should have received a 1099R in 2019 reflecting this return of capital and earnings.  Did you? If so, you will need to amend your 2018 return to say that you returned the excess contribution and then amend your 2019 return proving that the 2018 excess capital was returned in the form of a 1099R.

Let us know if these events that I mentioned above have transpired. 

[imangoldasteh]

@DaveF1006 

@macuser_22 

I had excess contribution in 2021 and got the payment + earning in January 2022.  I want to do it correctly now so it wouldn't need any amendment later.  I know that if I add the excess amount now before April 15 2022 for 2021 tax filing I can ignore 2022-  1099-R code P and I just need to file 2022 1099-R code 8 next year.

however once I put all the numbers based on w2, the tax software automatically add taxable values once the value on box 12 of my w2 goes above the limit and it will put that surplus value as a taxable amount.    on the other hand I am adding that amount as 1099-misc and I am paying taxes and that going to be double counting and taxation.     My solution was reducing the w2 box 12 to the 401k limit (decreasing that with same excess amount) to avoid that error in software)  and since no where in tax document that box 12D goes to IRS that won't cause any problem for my tax filing and calculation or possible audit.   am I right? 

[DaveF1006]

It depends. First of all, why are you entering a 1099-MISC. Don't enter one unless you receive one. Also, do not adjust the amount on the W2.  Leave it the way it is reported.

Please use the procedures that Turbo tax Expert MinhT1, outlines in his Turbo Tax post. Please follow those procedures closely in the manner that he describes them. Do not create a 1099R. Here is his recommended procedure.

• Click on Federal in the left-hand column, then on Wages & Income
• Under All Income, scroll down to Less Common Income
• Select Miscellaneous Income and click Start
• Select Other income not already reported on a Form W-2 or Form 1099 and click on Start
• Answer the question "Did you receive any other wages?  Yes
• Click through the questions till you get to Any Other Earned Income
• Answer Yes to Did you earn any other wages?
• Indicate Other as Source of Other Earned Income and click Continue
• For the description enter "2021 Excess 401K Deferrals" and click on Done