Snat wrote:

- quote -

You are correct. How you handle this is explained in the third
column of page 8 of IRS Pub 525 under the heading Excess
Deferrals. You need to have the excess and any earnings on the
excess distributed to you by the filing deadline in order to
avoid double taxation. The instructions will tell you how to
report the excess on Line 7 of your 2003 Form 1040 tax return.
Any earnings on the excess withdrawn in 2004 would be subject to
income tax in 2004 and also would be subject to the 10% add'l tax
for early withdrawal if you have not reached age 59 1/2.
http://www.irs.gov/publications/index.html

--
Alan
http://taxtopics.net

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"Snat" <osnagnasty[at]yahoo.com> writes:

- quote -

If you can get one of the plans to refund the excess, do it.
Otherwise you'll wind up paying tax twice on the excess.
Regardless of whether you get the refund or not, add the
excess to your wages on your 2003 return.

If you get the refund and a 1099-R it will be coded to show
that it was a refund of 2003 overcontributions. No problem.

I believe this is covered in Publication 525.

Phil Marti
Topeka, KS

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I accidentally had more than $12000 deferred for my 401k in
2003. Some from one job then changed jobs and over did it on
that one.

How do I rectify this situation?

From a look at IRS Pub 560 I gather I have to request the
(latest) plan to distribute the excess to me. Somewhere in
Turbotax help I saw something saying I had to declare this
amount as income on my 2003 return. Where? It didn't say.
I don't think I get a new W2.

It also seems I may/will get a 1099-R in 2004 for the
distribution but I think don't have to pay tax again (and no
penalty) if I get the plan to distribute the extra to me
before April 15th.

Am I completely/partially correct? Help appreciated.

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