Excess contribution to Solo 401K
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Anonymous
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I contributed $2K over and above what I should to my Solo 401K. If i were a fulltime employee at a company, the administrator would have sent me a check for $2K before Apr 15 and life is good. Now, I am the administrator of my 401K as well. Should I just leave the money and claim only the right amount and the remainder (2K) next year (2018) or should I write a check to myself to withdraw the amount?
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Anonymous
| You should count $2000 towards your 2018, assuming the deposit was made in 2018 |
Anonymous
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I made this same mistake this year - mostly because I didn't earn quite as much as I did last year so my estimates were a bit off. Not a big deal at all.
You can just leave it in there and pay the taxes on the excess, which you would have paid anyhow had you not put that $2K into your solo401k. This is according Vanguard - where I have my solo. |
Anonymous
| If you made the contribution in 2017, you should withdraw the extra. And you probably need to do it today before you file your taxes. I would probably talk to an accountant actually. |
Anonymous
The rules are confusing. In one link I read that you will have to pay a 10% penalty on the excess and income if money stays in the account for each year it stays in. In another it says I can reclassify. In a third it says the 401k account will have to pay a penalty for accepting the excess. I've reached out to an accountant but no hope of getting an answer today hence posting on this forum. |
TwistdMike
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