I was wondering since IRS knows taxpayer made excess Roth/401k contribution from W-2, why wouldn't they flag or penalize the return when one files without adding amount on Line-1h to account for that excess?The IRS knows you made excess Roth deferrals. It's on your W2. I don't know how this is tracked long term, given that it might be decades before you withdraw. Presumably you need to contact one of the administrators and have the Roth contributions recharacterized as pre-tax. In a little bit of searching online, I found a discussion that concluded this is on the honor of the participant, so if OP never said anything, he will have gotten a free Roth deferral out of it.btw in the event the excess is considered the Roth, *how* does that get taxed on withdrawal? Do Roth plans have a way of tracking pre-tax basis? And even if they do, it seems like a big loophole where someone could change jobs, max Roth 401k at both, and just not tell the employers.
https://benefitslink.com/boards/topic/6 ... deferrals/
they already know it the 22.5k limit has been exceeded this year and they don't see any 1099-R from the taxpayer, why would they still leave it up to the taxpayer to fix it?
If they assign task of fixing to the taxpayer without really issuing any penalties, then that sounds like a loophole than a requirement or else they'd have enforced it through penalties.
Statistics: Posted by bogle005 — Wed Oct 16, 2024 12:46 am