First, if you haven't done so already, you should contact the Financial Institution holding your 401(K) to request a distribution of the excess contributions. This should be done before the due date of your return, 4/15/2019 to avoid double taxation on the amount. Check out IRS Pub 525 for more details: https://www.irs.gov/pub/irs-pdf/p525.pdf.
Next, you should report the excess contributions on Line 1 of your 2018 Tax Return by following these steps:
- Login to your TurboTax Online Account
- Click "Take Me to My Return"
- Click "Federal" from the left side of your screen
- Scroll down to "Less Common Income" and click "Show More"
- Select "Miscellaneous Income" and click Start or Update
- 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 "Continue" through the questions until 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 "2018 Excess 401K Deferrals" and click on Done
NOTE: There is currently an e-filing issue within TurboTax related to excess contributions. An update to fix the issue is expected to be released around 4/5/2019. You can check out this TurboTax FAQ for more information: Excess 401(k) Contribution Preventing E-filing. Be sure to sign up for updates to be alerted as soon as there is a solution.
