401K Excess Contribution
As I am working on completing my 2021 tax return it flagged that I had an excess in my 401k contribution for this year.
My understanding is I should now request the excess from my 401k administer which I will be doing this evening but where I am a bit confused is on my 2021 tax return where I account for it so I am not taxed this year and also next.
According to the turboxtax desktop version it says to:
Report the excess deferral on your 2021 return in the Income section for Retirement Plans and Social Security whether or not you received a Form 1099-R before you file your return. Enter as much information as you can. Report the excess deferral amount in boxes 1 and 2a, and use code P in box 7. Indicate that this is a 2022 Form 1099-R.
But online turbotax supports says to:
If you haven’t filed your 2021 return yet, to report a 2021 excess 401(k) deferral that was distributed in 2022:
- Sign in to TurboTax and open or continue your return.
- Select Federal from the left menu.
- Select Other Tax Situations. (Note: In some situations, you may need to go to Less Common Income and select Show More.
- Go to Miscellaneous Income, 1099-A, 1099-C and select Start.
- Select Other income not already reported on a Form W-2 or Form 1099 and then Start.
- On the page Did you receive any other wages?, answer Yes and select Continue.
- Continue until you get to the Any other earned income screen. Answer Yes and select Continue.
- On the page Enter Source of Other Earned income, select Other and Continue.
- On the page Any Other Earned Income, enter 2021 Excess 401(k) Deferrals for the description, enter the amount, and select Done.
Can someone point me to which one is the correct way as I want to prevent being double taxed and not having any red flags?
Thank you!
