topic What should I do with the elective deferral and the loss on the over-contribution? in Retirement tax questions

What should I do with the elective deferral and the loss on the over-contribution?

yongzhou — Mon, 03 Jun 2019 17:25:19 GMT

I over-contributed to my 401k in 2018. by $2852 and Fidelity got my excess contribution back, but only for $2,644.

You need to include the over-contribution to your 401(k)...

Rachel_W — Mon, 03 Jun 2019 17:25:20 GMT

You need to include the over-contribution to your 401(k) as wages on your 2018 Tax Return. (See instructions below)

Next year, you can include the $208 loss as a negative amount on Schedule 1, line 21 of your 2019 Form 1040. You can identify the loss as “Loss on Excess Deferral Distribution.”

To add your $2,852 401(K) overcontribution to your 2018 Wages, please follow these steps:

Login to your return
Click "Take Me To My Return"
Click "Federal" on the left side of your screen
Scroll down to "Less Common Income" (You may need to click "Show All" to get this option to pop up)
Select "Miscellaneous Income, 1099-A, 1099-C" and click "Start or Update"
Select "Other income not already reported on a Form W-2 or Form 1099" and click on "Start"
Answer "Yes" to the Question "Did you receive any other wages?"
Click "Continue" through the questions until you get to the section "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 "2018 Excess 401K Deferrals", enter the amount, and click on "Done"

Thank you for the clear answer!!!

yongzhou — Mon, 03 Jun 2019 17:25:20 GMT

Thank you for the clear answer!!!

You're welcome!

Rachel_W — Mon, 03 Jun 2019 17:25:21 GMT

You're welcome!

Good luck eFiling that return :)
mick — Mon, 03 Jun 2019 17:25:23 GMT
Good luck eFiling that return 🙂

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Hi, I followed above steps, but TurboTax doesn't allow me...

ningz — Mon, 03 Jun 2019 17:25:24 GMT

Hi, I followed above steps, but TurboTax doesn't allow me to efile: it is stuck at the "check this entry" page, with description "Forms W2 & W2-G summary: elective deferrals - TP $23669 is more than the allowed $18500 for a qualified plan. Please check your entries on your W2 for qualified plans". I tried modifying the 12b elective deferrals to qualified plans entry to 18500 but it doesn't stick. What should I do? Should I modify my W2 entry instead?

Re: Hi, I followed above steps, but TurboTax doesn't allow me...

mallik — Tue, 21 Apr 2020 16:44:55 GMT

When I enter negative amount as described above, Turbotax is not allowing me to eFile my Federal tax returns. It says I need to fix the return and 'Wages, Salaries & Tips worksheet: TP other earned inc shouldn't be less than zero." Please help!!