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403b 457b (government) and h&r block

Posted: Thu Jan 29, 2015 8:06 am
by NightFall
So I switched to h&r block's tax software from turbo tax. Last year was also the first year I started contributing to a 457b. I maxed out both my 403b and 457b at 17500 for a total of 35000. When I entered my w2 into the software, it said I had exceeded my elective contribution of 17500 and the rest would be treated as taxable. Now my employer as well as multiple online sources say I should have separate limits for these plans. I can force the software to treat it as tax deferred by just entering a higher max contribution limit. However, you would think something simple like this would be built in. Is this just an oversight (potentially very expensive for those who don't catch it) or am I interpreting things wrong?

Re: 403b 457b (government) and h&r block

Posted: Thu Jan 29, 2015 9:02 am
by retiredjg
You are correct that both $17,500 contributions reduce your taxable income for a total R $35k. Can't help with the software. I'd probably just do it manually.

To help others in the future, perhaps there is some kind of "report this glitch" feature.

Re: 403b 457b (government) and h&r block

Posted: Thu Jan 29, 2015 9:10 am
by Bogleer
My wife contributes max to her 403b and 457b each year as well. Additionally, I've used HR Block for several years. When I answer the questions, the software has immediately flagged that she has contributed more than allowed and asks if she has a higher limit...and then I enter the higher limit. I've never given it another thought, and I don't believe I'd consider it a glitch. If I recall, there may be more than one way to enter your info. But following along with the questions, I think it would be hard to miss. That's my two cents... :happy

Re: 403b 457b (government) and h&r block

Posted: Thu Jan 29, 2015 9:22 am
by NightFall
Bogleer wrote:My wife contributes max to her 403b and 457b each year as well. Additionally, I've used HR Block for several years. When I answer the questions, the software has immediately flagged that she has contributed more than allowed and asks if she has a higher limit...and then I enter the higher limit. I've never given it another thought, and I don't believe I'd consider it a glitch. If I recall, there may be more than one way to enter your info. But following along with the questions, I think it would be hard to miss. That's my two cents... :happy
Yeah. That's what I ended up doing. At least my understanding of the two plans was correct. Still, it's fairly easy to figure out from the W2 since it labels the contributions as 403b and 457b contributions. I probably don't understand all of the intricacies that could happen. I wonder if TurboTax does a better job with this or not. I might have to try it when I get to the exception cases at FRA and over 50 for both of these plans.

Re: 403b 457b (government) and h&r block

Posted: Thu Jan 29, 2015 9:39 am
by retiredjg
See if you may be entering things in the wrong place or way. You may be entering both as elective deferrals. One of these is elective deferrals (your 403b contributions). The other is not elective deferrals (your 457b contribution). Is there another category or code that would work?

Re: 403b 457b (government) and h&r block

Posted: Thu Jan 29, 2015 10:43 am
by House Blend
retiredjg wrote:One of these is elective deferrals (your 403b contributions). The other is not elective deferrals (your 457b contribution).
That's not likely what is happening. It's just a bug or design flaw.

457(b) and 403(b) elective deferral limits are separate.

Either one might have mandatory employee contributions in it, and those don't count toward that particular limit. And given my low expectations for tax software, I'd expect that it would misunderstand those as well.

My W-2 reports a maxed out 457(b) and a maxed out 403(b), as well as mandatory employee contributions into a 401(a). All three amounts are deducted from my wages. (The 401(a) and 401(k) and 403(b) elective deferral limits are all combined into one.)

Would be fun to see how many errors the software makes with that.

Re: 403b 457b (government) and h&r block

Posted: Fri Jan 30, 2015 3:37 am
by Mudpuppy
Bogleer wrote:My wife contributes max to her 403b and 457b each year as well. Additionally, I've used HR Block for several years. When I answer the questions, the software has immediately flagged that she has contributed more than allowed and asks if she has a higher limit...and then I enter the higher limit.
I just fired up HR Block 2014 software and tried this out. Like Bogleer said, it asked at the end of the income section if I had a higher limit, then it asked for the higher limit. I entered $35000 for the limit and it was perfectly happy. So you might want to walk through the income section dialogs again and make sure to select that you have a higher limit than $17500 when it asks.

The only "bug" that one might flag on this is that it doesn't automatically detect that the higher limit is in play when it sees a combination of the G code and another retirement plan code in box 12 on the W2. I would assume it also doesn't automatically detect when catch-up contributions are in play. I'm assuming the programmers decided to flag the situation in the income dialog boxes rather than try to program the logic for all possible scenarios.

Re: 403b 457b (government) and h&r block

Posted: Wed Jan 24, 2018 11:17 pm
by stannius
What's not obvious is that if the question is only asked at the end of the income section. *Not* after the wages sub-section. If you don't go through all the steps (i.e. you're some kind of form-loving, skipping-around-the-steps kinda person) you won't be asked the question. And so it defaults to "no" and treats the deferrals as excessive.

Re: 403b 457b (government) and h&r block

Posted: Fri Jan 04, 2019 8:29 pm
by tibbitts
Yes, dredging up ancient history, whether you consider this a breathtakingly stupid design decision, or simply an error.

So in the spring of 2018, I seem to recall the solution was described in detail here:

http://community.hrblock.com/t5/All-Thi ... alse#M3473

I'm not marking that as a link because it's broken. In fact the entire HRB forum seems to be gone. A quick Google search turns up nothing.

I seriously hope HRB hasn't replaced its forum with... Facebook! Ugh!

Edit: Well, I didn't intentionally make it a link, but it may appear that way.

Re: 403b 457b (government) and h&r block

Posted: Tue Jan 29, 2019 3:45 pm
by tenkuky
This happened to me today as HR Block coded the 457 deferrals as excess and added it to taxable wages (not on W-2)
Thanks to this thread, I went in and manually made limit as $37,000.
I just pray that I am doing this correctly.
Anyone recently with this issue?
PS: I did get the latest update to HRB so hope they intend to fix this glitch.

Re: 403b 457b (government) and h&r block

Posted: Tue Jan 29, 2019 3:58 pm
by stannius
tenkuky wrote:
Tue Jan 29, 2019 3:45 pm
This happened to me today as HR Block coded the 457 deferrals as excess and added it to taxable wages (not on W-2)
Thanks to this thread, I went in and manually made limit as $37,000.
I just pray that I am doing this correctly.
Anyone recently with this issue?
PS: I did get the latest update to HRB so hope they intend to fix this glitch.
I just dealt with this over the weekend. At this point the "glitch" has existed at least for the four or five years I've been using H&R Block's desktop software, probably longer. I wouldn't hold my breath that they're ever going to do anything about it. If you go through the interview the software eventually asks a question about the excess deferral. I gave the same answer as you. I am not an accountant and I can't speak to your personal tax situation, but I am confident that for my family, I have entered the information correctly.

Re: 403b 457b (government) and h&r block

Posted: Sun Feb 10, 2019 10:50 pm
by tibbitts
stannius wrote:
Tue Jan 29, 2019 3:58 pm
tenkuky wrote:
Tue Jan 29, 2019 3:45 pm
This happened to me today as HR Block coded the 457 deferrals as excess and added it to taxable wages (not on W-2)
Thanks to this thread, I went in and manually made limit as $37,000.
I just pray that I am doing this correctly.
Anyone recently with this issue?
PS: I did get the latest update to HRB so hope they intend to fix this glitch.
I just dealt with this over the weekend. At this point the "glitch" has existed at least for the four or five years I've been using H&R Block's desktop software, probably longer. I wouldn't hold my breath that they're ever going to do anything about it. If you go through the interview the software eventually asks a question about the excess deferral. I gave the same answer as you. I am not an accountant and I can't speak to your personal tax situation, but I am confident that for my family, I have entered the information correctly.
I can't find where this supposed option to enter a higher combined limit exists now that HR Block has destroyed the link I listed above. So I won't be using HR Block software this year, apparently. HR Block refuses to provide assistance with the error. There is a direct way to enter the limit, I just don't remember what it is.
EDIT: Okay I found it, but not through the menu. Indeed I had to do the entire long and painful interview process. There had been a way to do that previously, and probably still is. So I entered 49000 and and now the taxes are showing the correct amount due. I can't believe they haven't fixed this after so many years. Just horrible software design.

Re: 403b 457b (government) and h&r block

Posted: Mon Feb 11, 2019 9:58 am
by stannius
H&R Block software seems to put the higher contribution limit on the worksheet "NON-W2 WAGES", in the "MINI-WORKSHEET FOR EXCESS SALARY DEFERRALS". I can't seem to find this worksheet mentioned anywhere other than in reference (help forums, lists of supported forms, etc.) to H&R Block's software.

Re: 403b 457b (government) and h&r block

Posted: Mon Feb 11, 2019 10:06 am
by tfb
stannius wrote:
Mon Feb 11, 2019 9:58 am
H&R Block software seems to put the higher contribution limit on the worksheet "NON-W2 WAGES", in the "MINI-WORKSHEET FOR EXCESS SALARY DEFERRALS". I can't seem to find this worksheet mentioned anywhere other than in reference (help forums, lists of supported forms, etc.) to H&R Block's software.
In the software (not online), click on Forms on the top. Select the "Show All Forms" radio button. Look at the worksheets under "Form 1040 and Schedules 1-6." It's the 6th item in my version.

Re: 403b 457b (government) and h&r block

Posted: Sat Feb 16, 2019 3:25 pm
by tibbitts
My plan after fighting this last year was to switch to FreeTax, but I didn't. However today I went to do my second return (to verify the first) on FreeTax and now it's complaining about the limit (it didn't last year) and I haven't found a way to override yet. I've submitted a question to Freetax so we'll see how that works out.

Re: 403b 457b (government) and h&r block

Posted: Sun Feb 17, 2019 2:45 pm
by henrikk
In H&R Block 2018 there is a "Income" section under titled: "Excess Retirement Contributions" (towards the bottom of the income section) where you can manually override the $18K or $24.5K limit and set it what it should be in your case (probably 18K+18K, 24.5K+24.5K or 24.5K+37K, depending on your age and circumstances). Very unintuitive and easy to miss. I missed it the first time.