I changed my job last year. I updated my current payroll system with previous contribution amount.
However, I received an unexpected paycheck a month after I left my previous job for a small amount. It’s associated 401k contribution (less than $100) put me over the limit. I didn’t realize it until it was too late.
Apparently, even though the tax return deadline was moved, the excess contribution correction deadline remained 4/15 (unlike last year). So, currently I still have the excess money in my 401k. Fidelity said that they can’t remove the money after the deadline. I know that I will be double taxed on the excess. But, I thought that there will also be a penalty till the excess is removed.
Anyone else in this situation?
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You will get taxed on it now (after you add it as income) and then again when you get the money out when you retire.
This was easy and possible because I did everything before the April deadline.