401k Excess Deferral Reporting

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Joined: Mon Mar 19, 2018 1:43 pm

401k Excess Deferral Reporting

Post by matsu42 » Mon Mar 19, 2018 1:54 pm

Good Afternoon!

I have read through about a dozen or so posts on here as well as various tax software forums regarding excess deferral reporting. Unfortunately, no one mentions whether or not it is okay to report more than the government limit when filling out your W-2 after correcting the excess deferral.

I will try to be as direct and brief as possible with my situation:
  • Worked at (2) companies in 2017
  • Overcontributed to 401k in tax year 2017 by ~$2,000
  • Realized mistake on March 2nd, requested a refund of excess deferral, and received the refund on March 14th of 2018
  • Requested tax documents which resulted in an email with two 1099-R, one for the excess deferral and one for the gains
  • I'm using freetaxusa which allowed me to enter a 1099-R for the excess deferral with code P in box 8, and it asked me if this is for 2018
  • The refunded $2,000 was then added to my income on my 1040 per the IRS requirement for excess deferrals
My question to everyone is whether or not it is alright to still include the information from my original W-2 from my new employer as the combined 401k contribution exceeds the government maximum. As far as I understand I have followed the requirements to fix this error. My only concern is that I am reporting an extra $2,000 of income and I may raise a flag with the IRS if I report more than the $18,000 in 401k contributions.

Freetaxus, despite accepting my 2018 1099-R, still warns me before I submit that I have contributed too much to my 401k and that I need to check and fix my W-2 to fix this error.

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