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  • Small 401k Overcontribution for 2017...

    Held two jobs in 2017.  Previous job 403b contribution was #13,500.  Started my second job and did everything possible to schedule my 401k contributions to not go over $4,500 (for the combined $18,000 annual limit).  Unexpected bonus check at the end of December meant that some additional money went to the 401k and I ended up with $18,169 for my annual 403b/401k contribution.  I told our HR administrator and the resolution was a check mailed directly to me from Fidelity as a distribution from the account for $172.52 (the $169 plus $3.52 gain).

    1) Will I get dinged on my tax return for showing a contribution $169 greater than the $18k limit?

    2) Since the "distribution" comes in 2018, will I have to report the $172.52 next year via 1099-R and pay additional taxes on that money coming out of a pre-tax account??

    I recognize that the money mailed to me was all pre-tax anyhow, so subject to my usual taxes, but will there be a penalty?

    Any input on how to handle this is appreciated.

  • #2
    You have done everything right and they apparently handled it promptly, thumbs up! There is no penalty as long as you take the $ out before 4/17/18, which has been done. The overcontribution is taxed for 2017. There is a possibility that they hadn't closed out the payroll for 2017 and it will be handled on your 2017 W2, which would be nice. In that case, you'll pay tax on the $3.52 (for 2017 or 2018, whenever it is reported to you).
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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