excess 401(k) contribution

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Subject Author Date excess 401(k) contribution Paul 04-03-2007  Re: excess 401(k) contribution Phil Marti 04-04-2007  Re: excess 401(k) contribution Paul 04-05-2007
Posted by Paul on April 3, 2007, 6:46 pm Please log in for more thread options I had an excess 401(k)contribution in 2006 because of a failed ADP test, and the refund was paid by March 15, 2007. In January 2008, I will receive a 2007 1099-R with code P (taxable in 2006). Would there be any penalty if I waited until I received the 1099-R in January 2008 and then paid the tax by filing a 1040x for 2006? << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Phil Marti on April 4, 2007, 2:20 pm Please log in for more thread options > I had an excess 401(k)contribution in 2006 because of a > failed ADP test, and the refund was paid by March 15, 2007. > In January 2008, I will receive a 2007 1099-R with code P > (taxable in 2006). Would there be any penalty if I waited > until I received the 1099-R in January 2008 and then paid > the tax by filing a 1040x for 2006? No penalty, but you would have the hassle of amending your 2006 return and you would owe interest on the additional tax from 4/15/2007 to the date of payment. Why would you want to file a return you know is incorrect just to have to amend it later and pay interest? -- Phil Marti Clarksburg, MD << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Paul on April 5, 2007, 1:49 am Please log in for more thread options >> I had an excess 401(k)contribution in 2006 because of a >> failed ADP test, and the refund was paid by March 15, 2007. >> In January 2008, I will receive a 2007 1099-R with code P >> (taxable in 2006). Would there be any penalty if I waited >> until I received the 1099-R in January 2008 and then paid >> the tax by filing a 1040x for 2006? > No penalty, but you would have the hassle of amending your > 2006 return and you would owe interest on the additional tax > from 4/15/2007 to the date of payment. > > Why would you want to file a return you know is incorrect > just to have to amend it later and pay interest? Ok, thanks. I agree that I should include the refund on my 2006 1040. However, since there was no withholding associated with refund, the refund could cause an underpayment of 2006 withholding/estimated payments. Can a refund of 2006 excess 401(k)contributions due to a failed ADP test result in an underpayment penalty even though the failed test and refund amount was not reported to the taxpayer until after January 15, 2006 (the last estimated tax payment due date)? << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Similar Threads Posted 401(K) Excess Contribution January 26, 2007, 11:52 pm excess 401(k) contribution & W-2 April 16, 2007, 12:09 am Excess IRA contribution January 28, 2008, 8:55 pm excess contribution to 457 February 1, 2008, 11:25 am Refund of "excess" 401(k) contribution due to HCE tag January 25, 2007, 2:43 am SIMPLE IRA - Possible excess contribution? February 2, 2007, 2:10 am excess 401k contribution June 21, 2009, 4:18 pm Best Method for Return of Simple IRA Excess Contribution February 27, 2008, 4:59 pm Paying Penalty for Excess Roth IRA Contribution April 12, 2006, 11:09 pm Question regarding penalty associated with excess Roth IRA contribution April 14, 2006, 3:45 am