Hi, i accidently over fund 401K in 2024 and immediately removed the excess amount before end of 2024. so how should i report it?
1, i am not sure if this refund amount is reflected on my W2 or not, but turbotax catches the over fund amount $1000 after done with income section and instruct to input in "retirement plan and social security" to report 1099_R with code "P" instead of code "8" that on 1099_R i received.
2, i received a check of withdraw amount from 401K of amount $800 ( $1000 - loss $100 - tax withheld $100) and deposit it in my bank account in 2024, which means the over fund and removal happened both in 2024.
3, i see there is 1099_R in my 401K account under 2024 tax form from early 2025.
4, the over fund is $1000, and on 1099_R, the gloss distribution is $900, i guess it exclude market value loss?
according to turbotax example, it instruct to go to Retirement Plans and Social Security and report the 1099_R with code "P" in box 7, however my 1099_R box 7 has code "8", so:
i, should i just enter the 1099_R with code "P" as instructed in turbotax? but code "P" means: excessive contribution in 2023. which doesnt seems right.
ii, or, i had seen people instruct other way to manually enter the excess amount withdrew in income section and report 1099_R with code "8" in box 7 in next year 2025?
- if so, should i enter $1000 as 2024 income? or should i enter the exact amount i received in the check, which is $800?
- then what about the market value loss $100? and tax withheld $100?
iii, and do i need to do anything for next tax year 2025?
it is pretty confusing, can you plz help to provide more clarification of how should i report it? thank you.
