So now I have to amend the 2023 return and paid too much in 2023 taxes. I DO NOT recommend Turbotax - this is an epic failure against a VERY SIMPLE tax law. While I understand not all 401K Plans allow catch up deferrals for individuals 50+ as allowed by the SECURE Act 2.0 issued in 2022, that's not an issue if tax filers document the total 401K before tax contributions as long as it does not exceed Federal 401K contribution limits. Literally an epic failure for a tax filing application.
Hang on...it gets worse! TT is making the same mistake for 2024!!! SERIOUSLY?! Hasn't anyone else experienced this problem? FYI - using Windows Desktop Deluxe version.
IRS website for 401(k) contribution including 'catch up' - https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions
Employee Contributions to an employer sponsored 401(k) account are entered on a W-2 in box 12 with a code of D. The contributions are not entered anywhere else on a tax return.
"Federal tax laws allow "catch-up" 401K contributions totaling $32,500 in 2023"
You are mistaken. The extra catch-up for those age 60, 61, 62 or 63 applies only to tax years beginning after December 31, 2024, plan permitting. The maximum elective deferral with catch-up for 2023 was $30,000.
From SEC. 109 of the SECURE 2.0 Act:
(d) <<NOTE: 26 USC 414 note.>> Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
With catch-up, the elective deferral limit for 2023 was $30,000 and for 2024 it was $30,500.